EXHIBIT 10.11
JACOBS ENGINEERING GROUP, INC.
401(k) PLUS SAVINGS PLAN
Plan and Trust Agreement
Second Complete
Amendment and Restatement
Generally Effective January 1, 1990
Jacobs Engineering Group, Inc. 401(k) Plus Savings Plan and Trust
Second Complete Amendment and Restatement
Generally Effective January 1, 1990
Jacobs Engineering Group, Inc. previously established the Jacobs Engineering
Group Inc. Thrift Savings Retirement Plan as renamed the Jacobs Engineering
Group, Inc. 401(k) Plus Savings Plan effective January 1, 1990, for the benefit
of eligible employees of the Company and its participating affiliates. The Plan
is intended to constitute a qualified profit sharing plan, as described in Code
section 401(a), which includes a qualified cash or deferred arrangement, as
described in Code section 401(k).
The provisions of this Plan and Trust relating to the Trustee constitute the
trust agreement which is entered into by and between Jacobs Engineering Group,
Inc. and Wells Fargo Bank, National Association. The Trust is intended to be
tax exempt as described under Code section 501(a).
The Plan constitutes an amendment and restatement of the Jacobs Engineering
Group Inc. Thrift Savings Retirement Plan as renamed the Jacobs Engineering
Group, Inc. 401(k) Plus Savings Plan effective January 1, 1990, which was
originally established effective as of October 1, 1974, and its related trust
agreement.
The Jacobs Engineering Group, Inc. 401(k) Plus Savings Plan and Trust, as set
forth in this document, is hereby amended and restated generally effective as of
January 1, 1990. This constitutes a second complete amendment and restatement
generally effective January 1, 1990.
Date: December 22, 1994 Jacobs Engineering Group, Inc.
By: /s/ Signature Appears Here
-----------------------------------------
Title: Sr. V.P. Finance and Administration
------------------------------------
The trust agreement set forth in those provisions of this Plan and Trust which
relate to the Trustee is hereby executed.
Date: December 23, 1994 Wells Fargo Bank, National Association
By: /s/ Signature Appears Here
-----------------------------------------
Title: Vice President
------------------------------------
Date: December 23, 1994 Wells Fargo Bank, National Association
By: /s/ Signature Appears Here
-----------------------------------------
Title: Vice President
------------------------------------
TABLE OF CONTENTS
1 DEFINITIONS.............................................. 1
-----------
2 ELIGIBILITY.............................................. 8
-----------
2.1 Eligibility........................................ 8
2.2 Ineligible Employees............................... 8
2.3 Ineligible or Former Participants.................. 8
3 PARTICIPANT CONTRIBUTIONS................................ 9
-------------------------
3.1 Pre-Tax Contribution Election...................... 9
3.2 Changing a Contribution Election................... 9
3.3 Revoking and Resuming a Contribution Election...... 9
3.4 Contribution Percentage Limits..................... 9
3.5 Refunds When Contribution Dollar Limit Exceeded.... 10
3.6 Timing, Posting and Tax Considerations............. 10
4 ROLLOVERS & TRUST-TO-TRUST TRANSFERS..................... 11
------------------------------------
4.1 Rollovers.......................................... 11
4.2 Transfers From Other Qualified Plans............... 11
5 EMPLOYER CONTRIBUTIONS................................... 12
----------------------
5.1 Matching Contributions............................. 12
6 ACCOUNTING............................................... 13
----------
6.1 Individual Participant Accounting.................. 13
6.2 Sweep Account is Transaction Account............... 13
6.3 Trade Date Accounting and Investment Cycle......... 13
6.4 Accounting for Investment Funds.................... 13
6.5 Payment of Fees and Expenses....................... 13
6.6 Accounting for Participant Loans................... 14
6.7 Error Correction................................... 14
6.8 Participant Statements............................. 15
6.9 Special Accounting During Conversion Period........ 15
6.10 Accounts for QDRO Beneficiaries.................... 15
7 INVESTMENT FUNDS AND ELECTIONS........................... 16
------------------------------
7.1 Investment Funds................................... 16
7.2 Investment Fund Elections.......................... 16
7.3 Responsibility for Investment Choice............... 16
7.4 Default if No Election............................. 16
7.5 Timing............................................. 17
7.6 Investment Fund Election Change Fees............... 17
8 VESTING & FORFEITURES.................................... 18
---------------------
8.1 Fully Vested Contribution Accounts................. 18
8.2 Forfeitures Prior to the Effective Date............ 18
8.3 Rehired Employees.................................. 18
i
9 PARTICIPANT LOANS........................................ 19
-----------------
9.1 Participant Loans Permitted........................ 19
9.2 Loan Application, Note and Security................ 19
9.3 Spousal Consent.................................... 19
9.4 Loan Approval...................................... 19
9.5 Loan Funding Limits................................ 19
9.6 Maximum Number of Loans............................ 20
9.7 Source and Timing of Loan Funding.................. 20
9.8 Interest Rate...................................... 20
9.9 Repayment.......................................... 20
9.10 Repayment Hierarchy................................ 21
9.11 Repayment Suspension............................... 21
9.12 Loan Default....................................... 21
9.13 Call Feature....................................... 21
10 IN-SERVICE WITHDRAWALS................................... 22
----------------------
10.1 In-Service Withdrawals Permitted................... 22
10.2 In-Service Withdrawal Application and Notice....... 22
10.3 Spousal Consent.................................... 22
10.4 In-Service Withdrawal Approval..................... 22
10.5 Minimum Amount, Payment Form and Medium............ 22
10.6 Source and Timing of In-Service Withdrawal Funding. 23
10.7 Hardship Withdrawals............................... 23
10.8 After-Tax Account Withdrawals...................... 24
10.9 Rollover Account Withdrawals....................... 25
10.10 Over Age 59 1/2 Withdrawals........................ 25
11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR AS REQUIRED BY LAW. 26
--------------------------------------------------------
11.1 Benefit Information, Notices and Election.......... 26
11.2 Spousal Consent.................................... 26
11.3 Payment Form and Medium............................ 26
11.4 Source and Timing of Distribution Funding.......... 27
11.5 Latest Commencement Permitted...................... 27
11.6 Payment Within Life Expectancy..................... 27
11.7 Incidental Benefit Rule............................ 27
11.8 Payment to Beneficiary............................. 28
11.9 Beneficiary Designation............................ 28
12 ADP AND ACP TESTS........................................ 29
-----------------
12.1 Contribution Limitation Definitions................ 29
12.2 ADP and ACP Tests.................................. 32
12.3 Correction of ADP and ACP Tests.................... 32
12.4 Multiple Use Test.................................. 33
12.5 Correction of Multiple Use Test.................... 33
12.6 Adjustment for Investment Gain or Loss............. 33
12.7 Testing Responsibilities and Required Records...... 34
12.8 Separate Testing................................... 34
ii
13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS............. 35
--------------------------------------------
13.1 "Annual Addition" Defined.......................... 35
13.2 Maximum Annual Addition............................ 35
13.3 Avoiding an Excess Annual Addition................. 35
13.4 Correcting an Excess Annual Addition............... 35
13.5 Correcting a Multiple Plan Excess.................. 36
13.6 "Defined Benefit Fraction" Defined................. 36
13.7 "Defined Contribution Fraction" Defined............ 36
13.8 Combined Plan Limits and Correction................ 36
14 TOP HEAVY RULES.......................................... 37
---------------
14.1 Top Heavy Definitions.............................. 37
14.2 Special Contributions.............................. 38
14.3 Adjustment to Combined Limits for Different Plans.. 39
15 PLAN ADMINISTRATION...................................... 40
-------------------
15.1 Plan Delineates Authority and Responsibility....... 40
15.2 Fiduciary Standards................................ 40
15.3 Company is ERISA Plan Administrator................ 40
15.4 Administrator Duties............................... 41
15.5 Advisors May be Retained........................... 41
15.6 Delegation of Administrator Duties................. 42
15.7 Committee Operating Rules.......................... 42
16 MANAGEMENT OF INVESTMENTS................................ 43
-------------------------
16.1 Trust Agreement.................................... 43
16.2 Investment Funds................................... 43
16.3 Authority to Hold Cash............................. 43
16.4 Trustee to Act Upon Instructions................... 44
16.5 Administrator Has Right to
Vote Registered Investment Company Shares.......... 44
16.6 Custom Fund Investment Management.................. 44
16.7 Authority to Segregate Assets...................... 45
17 TRUST ADMINISTRATION..................................... 46
--------------------
17.1 Trustee to Construe Trust.......................... 46
17.2 Trustee To Act As Owner of Trust Assets............ 46
17.3 United States Indicia of Ownership................. 46
17.4 Tax Withholding and Payment........................ 47
17.5 Trustee Duties and Limitations..................... 47
17.6 Trust Accounting................................... 47
17.7 Valuation of Certain Assets........................ 48
17.8 Legal Counsel...................................... 48
17.9 Fees and Expenses.................................. 48
iii
18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION........ 49
-------------------------------------------------
18.1 Plan Does Not Affect Employment Rights............. 49
18.2 Limited Return of Contributions.................... 49
18.3 Assignment and Alienation.......................... 49
18.4 Facility of Payment................................ 50
18.5 Reallocation of Lost Participant's Accounts........ 50
18.6 Claims Procedure................................... 50
18.7 Construction....................................... 51
18.8 Jurisdiction and Severability...................... 51
18.9 Indemnification by Employer........................ 51
19 AMENDMENT, MERGER AND TERMINATION........................ 52
---------------------------------
19.1 Amendment.......................................... 52
19.2 Merger............................................. 52
19.3 Plan Termination................................... 52
19.4 Termination of Employer's Participation............ 53
19.5 Replacement of the Trustee......................... 53
19.6 Final Settlement and Accounting of Trustee......... 53
APPENDIX A - INVESTMENT FUNDS.................................. 55
APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES................. 56
APPENDIX C - LOAN INTEREST RATE................................ 57
iv
1 DEFINITIONS
-----------
When capitalized, the words and phrases below have the following meanings
unless different meanings are clearly required by the context:
1.1 "Account". The records maintained for purposes of accounting for a
Participant's interest in the Plan. "Account" may refer to one or all
of the following accounts which have been created on behalf of a
Participant to hold specific types of Contributions under the Plan or
to hold Contributions made under the plan of a Related Company in
which a Participant formerly participated and which have been
transferred to this Plan on behalf of a Participant:
(a) "Pre-Tax Account". An account created to hold Pre-Tax
Contributions.
(b) "After-Tax Account". An account created to hold After-Tax
Contributions.
(c) "Rollover Account". An account created to hold Rollover
Contributions.
(d) "Matching Account". An account created to hold Matching
Contributions.
(e) "Prior Plan Account". An account created to hold Prior Plan
Contributions.
1.2 "ACP" or "Average Contribution Percentage". The percentage calculated
in accordance with Section 12.1.
1.3 "Administrator". The Company, which may delegate all or a portion of
the duties of the Administrator under the Plan to a Committee in
accordance with Section 15.6.
1.4 "ADP" or "Average Deferral Percentage". The percentage calculated in
accordance with Section 12.1.
1.5 "Beneficiary". The person or persons who is to receive benefits after
the death of the Participant pursuant to the "Beneficiary Designation"
paragraph in Section 11, or as a result of a QDRO.
1.6 "Code". The Internal Revenue Code of 1986, as amended. Reference to
any specific Code section shall include such section, any valid
regulation promulgated thereunder, and any comparable provision of any
future legislation amending, supplementing or superseding such
section.
1.7 "Committee". If applicable, the committee which has been appointed by
the Company to administer the Plan in accordance with Section 15.6.
1.8 "Company". Jacobs Engineering Group, Inc. or any successor by merger,
purchase or otherwise.
1
1.9 "Compensation". The sum of a Participant's Taxable Income and salary
reductions, if any, pursuant to Code sections 125, 402(e)(3), 402(h),
403(b), 414(h)(2) or 457.
For purposes of determining benefits under this Plan, Compensation is
limited to $200,000 (as indexed for the cost of living pursuant to
Code sections 401(a)(17) and 415(d)) per Plan Year. For purposes of
determining benefits under this Plan for Plan Years beginning after
December 31, 1993, Compensation is limited to $150,000 (as indexed for
the cost of living pursuant to Code sections 401(a)(17) and 415(d))
per Plan Year.
For purposes of the preceding sentences, in the case of an HCE who is
a 5% Owner or one of the 10 most highly compensated Employees, (i)
such HCE and such HCE's family group (as defined below) shall be
treated as a single employee and the Compensation of each family group
member shall be aggregated with the Compensation of such HCE, and (ii)
the limitation on Compensation shall be allocated among such HCE and
his or her family group members in proportion to each individual's
Compensation before the application of this sentence. For purposes of
this Section, the term "family group" shall mean an Employee's spouse
and lineal descendants who have not attained age 19 before the close
of the year in question.
For the purpose of determining HCEs and key employees, Compensation
for the entire Plan Year shall be used. For the purpose of
determining ADP and ACP, Compensation shall be limited to amounts paid
to an Eligible Employee while a Participant.
1.10 "Contribution". An amount contributed to the Plan by the Employer or
an Eligible Employee, and allocated by contribution type to
Participants' Accounts, as described in Section 1.1. For purposes
below, references to Employer and Plan shall also include the employer
under the plan of a Related Company and the plan of a Related Company
described in the preceding sentence. Specific types of contribution
include:
(a) "Pre-Tax Contribution". An amount contributed by the Employer
on an eligible Participant's behalf in conjunction with a
Participant's Code section 401(k) salary deferral election.
(b) "After-Tax Contribution". An amount previously contributed by a
Participant on an after-tax basis under former Plan provisions,
which continue to be accounted for in the Plan.
(c) "Rollover Contribution". An amount contributed by an Eligible
Employee which originated from another employer's qualified
plan.
(d) "Matching Contribution". An amount contributed by the Employer
on an eligible Participant's behalf based upon the amount
contributed by the eligible Participant.
2
(e) "Prior Plan Contribution". An amount previously contributed by
the Employer on an eligible Participant's behalf under former
Plan provisions, which continue to be accounted for in the Plan.
1.11 "Contribution Dollar Limit". The annual limit placed on each
Participant's Pre-Tax Contributions, which shall be $7,000 per
calendar year (as indexed for the cost of living pursuant to Code
sections 402(g)(5) and 415(d)). For purposes of this Section, a
Participant's Pre-Tax Contributions shall include (i) any Employer
contribution made under any qualified cash or deferred arrangement as
defined in Code section 401(k) to the extent not includible in gross
income for the taxable year under Code section 402(e)(3) or
402(h)(1)(B) (determined without regard to Code section 402(g)), and
(ii) any Employer contribution to purchase an annuity contract under
Code section 403(b) under a salary reduction agreement (within the
meaning of Code section 3121(a)(5)(D)).
1.12 "Direct Rollover". A payment from the Plan to an Eligible Retirement
Plan specified by a Distributee.
1.13 "Disability". A Participant's total and permanent, mental or physical
disability resulting in termination of employment as evidenced by (a)
receipt of disability payments under the Employer's long-term
disability program or (b) presentation of medical evidence
satisfactory to the Administrator.
1.14 "Distributee". An Employee or former Employee, the surviving spouse
of an Employee or former Employee and a spouse or former spouse of an
Employee or former Employee determined to be an alternate payee under
a QDRO.
1.15 "Effective Date". January 1, 1990, unless stated otherwise. The date
upon which the provisions of this document become effective. In
general, the provisions of this document only apply to Participants
who are Employees on or after the Effective Date. However, investment
and distribution provisions apply to all Participants with Account
balances to be invested or distributed after the Effective Date.
1.16 "Eligible Employee". An Employee of an Employer, except any Employee:
(a) whose compensation and conditions of employment are covered by a
collective bargaining agreement to which an Employer is a party
unless the agreement calls for the Employee's participation in
the Plan;
(b) who is treated as an Employee because he or she is a Leased
Employee;
(c) who is a nonresident alien who (i) either receives no earned
income (within the meaning of Code section 911(d)(2)), from
sources within the United States under Code section 861(a)(3);
or (ii) receives such earned income from such sources within the
United States but such income is exempt from United States
income tax under an applicable income tax convention;
3
(d) who is a temporary Employee; or
(e) who is a part-time Employee.
1.17 "Eligible Retirement Plan". An individual retirement account
described in Code section 408(a), an individual retirement annuity
described in Code section 408(b), an annuity plan described in Code
section 403(a), or a qualified trust described in Code section 401(a),
that accepts a Distributee's Eligible Rollover Distribution, except
that with regard to an Eligible Rollover Distribution to a surviving
spouse, an Eligible Retirement Plan is an individual retirement
account or individual retirement annuity.
1.18 "Eligible Rollover Distribution". A distribution of all or any
portion of the balance to the credit of a Distributee, excluding a
distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or
life expectancy) of a Distributee or the joint lives (or joint life
expectancies) of a Distributee and the Distributee's designated
Beneficiary, or for a specified period of ten years or more; a
distribution to the extent such distribution is required under Code
section 401(a)(9); and the portion of a distribution that is not
includible in gross income (determined without regard to the exclusion
for net unrealized appreciation with respect to Employer securities).
1.19 "Employee". An individual who is:
(a) directly employed by any Related Company and for whom any income
for such employment is subject to withholding of income or
social security taxes, or
(b) a Leased Employee.
1.20 "Employer". The Company and any Subsidiary or other Related Company
of either the Company or a Subsidiary which adopts this Plan with the
approval of the Company.
1.21 "ERISA". The Employee Retirement Income Security Act of 1974, as
amended. Reference to any specific section shall include such
section, any valid regulation promulgated thereunder, and any
comparable provision of any future legislation amending, supplementing
or superseding such section.
1.22 "Execution Date". The date on which this Plan and Trust document is
executed.
1.23 "Forfeiture Account". An account holding amounts forfeited by
Participants who have left the Employer, invested in interest bearing
deposits of the Trustee, pending disposition as provided in this Plan
and Trust and as directed by the Administrator.
1.24 "HCE" or "Highly Compensated Employee". An Employee described as a
Highly Compensated Employee in Section 12.
4
1.25 "Hour of Service". Each hour for which an Employee is entitled to:
(a) payment for the performance of duties for any Related Company;
(b) payment from any Related Company for any period during which no
duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, sickness,
incapacity (including disability), layoff, leave of absence,
jury duty or military service;
(c) back pay, irrespective of mitigation of damages, by award or
agreement with any Related Company (and these hours shall be
credited to the period to which the agreement pertains); or
(d) no payment, but is on a Leave of Absence (and these hours shall
be based upon his or her normally scheduled hours per week or a
40 hour week if there is no regular schedule).
The crediting of hours for which no duties are performed shall be in
accordance with Department of Labor regulation sections 2530.200b-2(b)
and (c). Actual hours shall be used whenever an accurate record of
hours are maintained for an Employee. Otherwise, an equivalent number
of hours shall be credited for each payroll period in which the
Employee would be credited with at least 1 hour. The payroll period
equivalencies are 45 hours weekly, 90 hours biweekly, 95 hours
semimonthly and 190 hours monthly.
An Employee's service with a predecessor or acquired company shall
only be counted in the determination of his or her Hours of Service
for eligibility and/or vesting purposes if (1) the Company directs
that credit for such service be granted, or (2) a qualified plan of
the predecessor or acquired company is subsequently maintained by any
Employer or Related Company.
1.26 "Ineligible". The Plan status of an individual during the period in
which he or she is (1) an Employee of a Related Company which is not
then an Employer, (2) an Employee, but not an Eligible Employee, or
(3) not an Employee.
1.27 "Investment Fund" or "Fund". An investment fund as described in
Section 16.2. The Investment Funds authorized by the Administrator to
be offered as of the Execution Date to Participants and Beneficiaries
are as set forth in Appendix A.
1.28 "Leased Employee". An individual who is deemed to be an employee of
any Related Company as provided in Code section 414(n) or (o).
1.29 "Leave of Absence". A period during which an individual is deemed to
be an Employee, but is absent from active employment, provided that
the absence:
(a) was authorized by a Related Company; or
5
(b) was due to military service in the United States armed forces
and the individual returns to active employment within the
period during which he or she retains employment rights under
federal law.
1.30 "NHCE" or "Non-Highly Compensated Employee". An Employee described as
a Non-Highly Compensated Employee in Section 12.
1.31 "Normal Retirement Date". The date of a Participant's 65th birthday.
1.32 "Owner". A person with an ownership interest in the capital, profits,
outstanding stock or voting power of a Related Company within the
meaning of Code section 318 or 416 (which exclude indirect ownership
through a qualified plan).
1.33 "Participant". An Eligible Employee who begins to participate in the
Plan after completing the eligibility requirements as described in
Section 2.1. An Eligible Employee who makes a Rollover Contribution
prior to completing the eligibility requirements as described in
Section 2.1 shall also be considered a Participant except for purposes
of provisions related to Contributions (other than a Rollover
Contribution). A Participant's participation continues until his or
her employment with all Related Companies ends and his or her Account
is distributed or forfeited.
1.34 "Pay". The base pay paid to an Eligible Employee by an Employer while
a Participant during the current period.
Pay is neither increased nor decreased by any salary credit or
reduction pursuant to Code sections 125 or 402(e)(3). Pay is limited
to $200,000 (as indexed for the cost of living pursuant to Code
sections 401(a)(17) and 415(d)) per Plan Year. Pay is limited to
$150,000 (as indexed for the cost of living pursuant to Code sections
401(a)(17) and 415(d)) per Plan Year effective for Plan Years
beginning after December 31, 1993.
1.35 "Plan". The Jacobs Engineering Group, Inc. 401(k) Plus Savings Plan
set forth in this document, as from time to time amended.
1.36 "Plan Year". The annual accounting period of the Plan and Trust which
ends on each December 31.
1.37 "QDRO". A domestic relations order which the Administrator has
determined to be a qualified domestic relations order within the
meaning of Code section 414(p).
1.38 "Related Company". With respect to any Employer, that Employer and
any corporation, trade or business which is, together with that
Employer, a member of the same controlled group of corporations, a
trade or business under common control, or an affiliated service group
within the meaning of Code section 414(b), (c), (m) or (o).
6
1.39 "Settlement Date". The date on which the transactions from the most
recent Trade Date are settled. Effective April 1, 1992, for each
Trade Date, the Trustee's next business day.
1.40 "Spousal Consent". The written consent given by a spouse to a
Participant's election or waiver of a specified form of benefit,
including a loan or in-service withdrawal, or Beneficiary designation.
The spouse's consent must acknowledge the effect on the spouse of the
Participant's election, waiver or designation and be duly witnessed by
a notary public. Spousal Consent shall be valid only with respect to
the spouse who signs the Spousal Consent and only for the particular
choice made by the Participant which requires Spousal Consent. A
Participant may revoke (without Spousal Consent) a prior election,
waiver or designation that required Spousal Consent at any time before
payments begin. Spousal Consent also means a determination by the
Administrator that there is no spouse, the spouse cannot be located,
or such other circumstances as may be established by applicable law.
1.41 "Subsidiary". A company which is 50% or more owned, directly or
indirectly, by the Company.
1.42 "Sweep Account". The subsidiary Account for each Participant through
which all transactions are processed, which is invested in interest
bearing deposits of the Trustee.
1.43 "Sweep Date". The cut off date and time for receiving instructions
for transactions to be processed on the next Trade Date.
1.44 "Taxable Income". Compensation in the amount reported by the Employer
as "Wages, tips, other compensation" on Form W-2, or any successor
method of reporting under Code section 6041(d).
1.45 "Trade Date". Each day the Investment Funds are valued, which is the
last business day of the month. Effective April 1, 1992, each day the
Investment Funds are valued, which is normally every day the assets of
such Funds are traded.
1.46 "Trust". The legal entity created by those provisions of this
document which relate to the Trustee. The Trust is part of the Plan
and holds the Plan assets which are comprised of the aggregate of
Participants' Accounts and the Forfeiture Account.
1.47 "Trustee". Wells Fargo Bank, National Association.
7
2 ELIGIBILITY
-----------
2.1 Eligibility
All Participants as of January 1, 1990 shall continue their
eligibility to participate. Each other Eligible Employee shall become
a Participant on the first day of the next month after the date he or
she completes a 12 month eligibility period in which he or she is
credited with at least 1,000 Hours of Service. The initial
eligibility period begins on the date an Employee first performs an
Hour of Service. Subsequent eligibility periods begin with the start
of each Plan Year beginning after the first Hour of Service is
performed.
2.2 Ineligible Employees
If an Employee completes the above eligibility requirements, but is
Ineligible at the time participation would otherwise begin (if he or
she were not Ineligible), he or she shall become a Participant on the
first subsequent date on which he or she is an Eligible Employee.
2.3 Ineligible or Former Participants
A Participant may not make or share in Plan Contributions, nor
generally be eligible for a new Plan loan, during the period he or she
is Ineligible, but he or she shall continue to participate for all
other purposes. An Ineligible Participant or former Participant shall
automatically become an active Participant on the date he or she again
becomes an Eligible Employee.
8
3 PARTICIPANT CONTRIBUTIONS
-------------------------
3.1 Pre-Tax Contribution Election
Upon becoming a Participant, an Eligible Employee may elect to reduce
his or her Pay by an amount which does not exceed the Contribution
Dollar Limit, within the limits described in the Contribution
Percentage Limits paragraph of this Section 3, and have such amount
contributed to the Plan by the Employer as a Pre-Tax Contribution.
The election shall be made as a whole percentage of Pay in such manner
and with such advance notice as prescribed by the Administrator. In
no event shall an Employee's Pre-Tax Contributions under the Plan and
all other plans, contracts or arrangements of all Related Companies
exceed the Contribution Dollar Limit for the Employee's taxable year
beginning in the Plan Year.
3.2 Changing a Contribution Election
A Participant who is an Eligible Employee may change his or her Pre-
Tax Contribution election as of any January 1, April 1, July 1 or
October 1 in such manner and with such advance notice as prescribed by
the Administrator. The changed percentage shall become effective with
the first payroll paid after such date. Participants' Contribution
election percentages shall automatically apply to Pay increases or
decreases.
3.3 Revoking and Resuming a Contribution Election
A Participant may revoke his or her Contribution election at any time
in such manner and with such advance notice as prescribed by the
Administrator, and such election shall be effective with the first
payroll paid after such date.
A Participant may resume Contributions by making a new Contribution
election at the same time in which a Participant may change his or her
election in such manner and with such advance notice as prescribed by
the Administrator, and such election shall be effective with the first
payroll paid after such date.
3.4 Contribution Percentage Limits
The Administrator may establish and change from time to time, without
the necessity of amending this Plan and Trust document, the minimum,
if applicable, and maximum Pre-Tax Contribution percentages,
prospectively or retrospectively (for the current Plan Year), for all
Participants. In addition, the Administrator may establish any lower
percentage limits for Highly Compensated Employees as it deems
necessary. As of the Effective Date, the maximum Contribution
percentages are:
9
Highly
Contribution Compensated All Other
Type Employees Participants
---- --------- ------------
Pre-Tax 6% 15%
Effective April 1, 1992, the maximum Contribution percentages are:
Highly
Contribution Compensated All Other
Type Employees Participants
---- --------- ------------
Pre-Tax 6% 185%
Irrespective of the limits that may be established by the
Administrator in accordance with this paragraph, in no event shall the
contributions made by or on behalf of a Participant for a Plan Year
exceed the maximum allowable under Code section 415.
3.5 Refunds When Contribution Dollar Limit Exceeded
A Participant who makes Pre-Tax Contributions for a calendar year to
this and any other qualified defined contribution plan in excess of
the Contribution Dollar Limit may notify the Administrator in writing
by the following March 1 (or as late as April 14 if allowed by the
Administrator) that an excess has occurred. In this event, the amount
of the excess specified by the Participant, adjusted for investment
gain or loss, shall be refunded to him or her by April 15 and shall
not be included as an Annual Addition under Code section 415 for the
year contributed. Refunds shall not include investment gain or loss
for the period between the end of the applicable Plan Year and the
date of distribution. However, for Plan Years ending before December
31, 1993, refunds shall include investment gain or loss for the period
between the end of the applicable Plan Year and the date of
distribution. Any Matching Contributions attributable to refunded
excess Pre-Tax Contributions as described in this Section shall be
deemed a Contribution made by reason of a mistake of fact and removed
from the Participant's Account.
3.6 Timing, Posting and Tax Considerations
Participants' Contributions, other than Rollover Contributions, may
only be made through payroll deduction. Such amounts shall be paid to
the Trustee in cash and posted to each Participant's Account(s) as
soon as such amounts can reasonably be separated from the Employer's
general assets and balanced against the specific amount made on behalf
of each Participant. In no event, however, shall such amounts be paid
to the Trustee more than 90 days after the date amounts are deducted
from a Participant's Pay. Pre-Tax Contributions shall be treated as
employer contributions in determining tax deductions under Code
section 404(a).
10
4 ROLLOVERS & TRUST-TO-TRUST TRANSFERS
------------------------------------
4.1 Rollovers
The Administrator may authorize the Trustee to accept a rollover
contribution in cash, within the meaning of Code section 402(c) or
408(d)(3)(A)(ii), directly from an Eligible Employee or effective
January 1, 1993, as a Direct Rollover from another qualified plan on
behalf of the Eligible Employee, even if he or she is not yet a
Participant. The Employee shall be responsible for furnishing
satisfactory evidence, in such manner as prescribed by the
Administrator, that the amount is eligible for rollover treatment. A
rollover contribution received directly from an Eligible Employee must
be paid to the Trustee in cash within 60 days after the date received
by the Eligible Employee from a qualified plan or conduit individual
retirement account. Contributions described in this paragraph shall
be posted to the applicable Employee's Rollover Account as of the date
received by the Trustee.
If it is later determined that an amount contributed pursuant to the
above paragraph did not in fact qualify as a rollover contribution
under Code section 402(c) or 408(d)(3)(A)(ii), the balance credited to
the Employee's Rollover Account shall immediately be (1) segregated
from all other Plan assets, (2) treated as a nonqualified trust
established by and for the benefit of the Employee, and (3)
distributed to the Employee. Any such nonqualifying rollover shall be
deemed never to have been a part of the Plan.
4.2 Transfers From Other Qualified Plans
The Administrator may instruct the Trustee to receive assets in cash
or in kind directly from another qualified plan. The Trustee may
refuse the receipt of any transfer if:
(a) the Trustee finds the in-kind assets unacceptable;
(b) instructions for posting amounts to Participants' Accounts are
incomplete;
(c) any amounts are not exempted by Code section 401(a)(11)(B) from
the annuity requirements of Code section 417; or
(d) any amounts include benefits protected by Code section 411(d)(6)
which would not be preserved under applicable Plan provisions.
Such amounts shall be posted to the appropriate Accounts of
Participants as of the date received by the Trustee.
11
5 EMPLOYER CONTRIBUTIONS
----------------------
5.1 Matching Contributions
(a) Frequency and Eligibility. For each period for which
Participants' Contributions are made, the Employer shall make
Matching Contributions as described in the following Allocation
Method paragraph on behalf of each Participant who contributed
during the period.
(b) Allocation Method. The Matching Contributions (including any
Forfeiture Account amounts applied as Matching Contributions in
accordance with Section 8.2) for each period shall total 50% of
each eligible Participant's Pre-Tax Contributions for the
period, provided that no Matching Contributions (and Forfeiture
Account amounts) shall be made based upon a Participant's
Contributions in excess of 6% of his or her Pay. The Employer
may change the 50% matching rate or the 6% of considered Pay to
any other percentages, including 0%, generally by notifying
eligible Participants in sufficient time to adjust their
Contribution elections prior to the start of the period for
which the new percentages apply.
(c) Timing, Medium and Posting. The Employer shall make each
period's Matching Contribution in cash as soon as is feasible,
and not later than the Employer's federal tax filing date,
including extensions, for deducting such Contribution. The
Trustee shall post such amount to each Participant's Matching
Account once the total Contribution received has been balanced
against the specific amount to be credited to each Participant's
Matching Account.
12
6 ACCOUNTING
----------
6.1 Individual Participant Accounting
The Administrator shall maintain an individual set of Accounts for
each Participant in order to reflect transactions both by type of
Contribution and investment medium. Financial transactions shall be
accounted for at the individual Account level by posting each
transaction to the appropriate Account of each affected Participant.
Participant Account values shall be maintained in shares for the
Investment Funds and in dollars for their Sweep and Participant loan
Accounts. At any point in time, the Account value shall be determined
using the most recent Trade Date values provided by the Trustee.
6.2 Sweep Account is Transaction Account
All transactions related to amounts being contributed to or
distributed from the Trust shall be posted to each affected
Participant's Sweep Account. Any amount held in the Sweep Account
will be credited with interest up until the date on which it is
removed from the Sweep Account.
6.3 Trade Date Accounting and Investment Cycle
Participant Account values shall be determined as of each Trade Date.
For any transaction to be processed as of a Trade Date, the Trustee
must receive instructions for the transaction by the Sweep Date. Such
instructions shall apply to amounts held in the Account on that Sweep
Date. Financial transactions of the Investment Funds shall be posted
to Participants' Accounts as of the Trade Date, based upon the Trade
Date values provided by the Trustee, and settled on the Settlement
Date.
6.4 Accounting for Investment Funds
Investments in each Investment Fund shall be maintained in shares.
The Trustee is responsible for determining the share values of each
Investment Fund as of each Trade Date. To the extent an Investment
Fund is comprised of collective investment funds of the Trustee, or
any other fiduciary to the Plan, the share values shall be determined
in accordance with the rules governing such collective investment
funds, which are incorporated herein by reference. All other share
values shall be determined by the Trustee. The share value of each
Investment Fund shall be based on the fair market value of its
underlying assets.
6.5 Payment of Fees and Expenses
Except to the extent Plan fees and expenses related to Account
maintenance, transaction and Investment Fund management and
maintenance, as set forth below, are paid by the Employer directly, or
indirectly, through the Forfeiture
13
Account as directed by the Administrator, such fees and expenses shall
be paid as set forth below. The Employer may pay a lower portion of
the fees and expenses allocable to the Accounts of Participants who
are no longer Employees.
(a) Account Maintenance: Account maintenance fees and expenses, may
include but are not limited to, administrative, Trustee,
government annual report preparation, audit, legal,
nondiscrimination testing, and fees for any other special
services. Account maintenance fees shall be charged to
Participants on a per Participant basis provided that no fee
shall reduce a Participant's Account balance below zero.
(b) Transaction: Transaction fees and expenses, may include but are
not limited to, recurring payment, Investment Fund election
change and loan fees. Transaction fees shall be charged to the
Participant's Account involved in the transaction provided that
no fee shall reduce a Participant's Account balance below zero.
(c) Investment Fund Management and Maintenance: Management and
maintenance fees and expenses related to the Investment Funds
shall be charged at the Investment Fund level and reflected in
the net gain or loss of each Fund.
As of the Effective Date, a breakdown of which Plan fees and expenses
shall generally be borne by the Trust (and charged to individual
Participants' Accounts) and those that shall be paid by the Employer,
directly or indirectly, is set forth in Appendix B and may be changed
from time to time, without the necessity of amending this Plan and
Trust Document.
The Trustee shall have the authority to pay any such fees and
expenses, which remain unpaid by the Employer for 60 days, from the
Trust.
6.6 Accounting for Participant Loans
Participant loans shall be held in a separate Account of the
Participant and accounted for in dollars as an earmarked asset of the
borrowing Participant's Account.
6.7 Error Correction
The Administrator may correct any errors or omissions in the
administration of the Plan by restoring any Participant's Account
balance with the amount that would be credited to the Account had no
error or omission been made. Funds necessary for any such restoration
shall be provided through payment made by the Employer, or by the
Trustee to the extent the error or omission is attributable to actions
or inactions of the Trustee, or if the restoration involves an
Employer Contribution Account, the Administrator may direct the
Trustee to use amounts from the Forfeiture Account.
14
6.8 Participant Statements
The Administrator shall provide Participants with statements of their
Accounts as soon after the end of each quarter of the Plan Year as is
administratively feasible.
6.9 Special Accounting During Conversion Period
The Administrator and Trustee may use any reasonable accounting
methods in performing their respective duties during the period of
converting the prior accounting system of the Plan and Trust to
conform to the individual Participant accounting system described in
this Section. This includes, but is not limited to, the method for
allocating net investment gains or losses and the extent, if any, to
which contributions received by and distributions paid from the Trust
during this period share in such allocation.
6.10 Accounts for QDRO Beneficiaries
A separate Account shall be established for an alternate payee
entitled to any portion of a Participant's Account under a QDRO as of
the date and in accordance with the directions specified in the QDRO.
In addition, a separate Account may be established during the period
of time the Administrator, a court of competent jurisdiction or other
appropriate person is determining whether a domestic relations order
qualifies as a QDRO. Such a separate Account shall be valued and
accounted for in the same manner as any other Account.
(a) Distributions Pursuant to QDROs. If a QDRO so provides, the
portion of a Participant's Account payable to an alternate payee
may be distributed, in a form as permissible under the
Distribution Once Employment Ends Section, to the alternate
payee at the time specified in the QDRO, regardless of whether
the Participant is entitled to a distribution from the Plan at
such time.
(b) Participant Loans. Except to the extent required by law, an
alternate payee, on whose behalf a separate Account has been
established, shall not be entitled to borrow from such Account.
If a QDRO specifies that the alternate payee is entitled to any
portion of the Account of a Participant who has an outstanding
loan balance, all outstanding loans shall generally continue to
be held in the Participant's Account and shall not be divided
between the Participant's and alternate payee's Accounts.
(c) Investment Direction. Where a separate Account has been
established on behalf of an alternate payee and has not yet been
distributed, the alternate payee may direct the investment of
such Account in the same manner as if he or she were a
Participant.
15
7 INVESTMENT FUNDS AND ELECTIONS
------------------------------
7.1 Investment Funds
Except for Participants' Sweep and loan Accounts, the Trust shall be
maintained in various Investment Funds. The Administrator shall
select the Investment Funds offered to Participants and may change the
number or composition of the Investment Funds, subject to the terms
and conditions agreed to with the Trustee. As of the Execution Date,
a list of the Investment Funds offered to Participants is set forth in
Appendix A, and may be changed from time to time, without the
necessity of amending this Plan and Trust document.
7.2 Investment Fund Elections
Each Participant shall direct the investment of all of his or her
Contribution Accounts.
A Participant shall make his or her investment election in any
combination of one or any number of the Investment Funds offered in
accordance with the procedures established by the Administrator and
Trustee. However, during the period of converting the prior
accounting system of the Plan and Trust to conform to the individual
Participant accounting system described in Section 6, Trust assets may
be held in any investment vehicle permitted by the Plan, as directed
by the Administrator, irrespective of Participant investment
elections.
The Administrator may set a maximum percentage of the total election
that a Participant may direct into any specific Investment Fund, which
maximum, if any, is set forth in Appendix A, and may be changed from
time to time, without the necessity of amending this Plan and Trust
document.
7.3 Responsibility for Investment Choice
Each Participant shall be solely responsible for the selection of his
or her Investment Fund choices. No fiduciary with respect to the Plan
is empowered to advise a Participant as to the manner in which his or
her Accounts are to be invested, and the fact that an Investment Fund
is offered shall not be construed to be a recommendation for
investment.
7.4 Default if No Election
The Administrator shall specify an Investment Fund for the investment
of that portion of a Participant's Account which is not yet held in an
Investment Fund and for which no valid investment election is on file.
The Investment Fund specified as of the Execution Date is as set forth
in Appendix A, and may be changed from time to time, without the
necessity of amending this Plan and Trust document.
16
7.5 Timing
A Participant shall make his or her initial investment election upon
becoming a Participant and may change his or her election at any time
in accordance with the procedures established by the Administrator and
Trustee. Investment elections received by the Trustee by the Sweep
Date will be effective on the following Trade Date.
7.6 Investment Fund Election Change Fees
A reasonable processing fee may be charged directly to a Participant's
Account for Investment Fund election changes in excess of a specified
number per year as determined by the Administrator.
17
8 VESTING & FORFEITURES
---------------------
8.1 Fully Vested Contribution Accounts
A Participant shall be fully vested in all Accounts at all times.
Notwithstanding, prior to the Effective Date a Participant's Matching
Account became vested in accordance with a vesting schedule then in
effect.
8.2 Forfeitures Prior to the Effective Date
Amounts representing forfeitures of non-vested Account balances from
Employer Contribution Accounts as forfeited prior to the Effective
Date in accordance with Plan provisions as then in effect, are
maintained in a single Forfeiture Account, and invested in interest
bearing deposits of the Trustee. Forfeiture Account amounts shall be
utilized to restore Accounts, to pay Plan fees and expenses, and to
reduce Matching Contributions as directed by the Administrator.
8.3 Rehired Employees
If a former Employee who last terminated prior to the Effective Date
is rehired subsequent to the Effective Date and before he or she has a
break in service, as such term was defined prior to the Effective Date
for this purpose, the amount forfeited when his or her employment last
terminated shall be restored to his or her Account. The amount shall
come from the Forfeiture Account to the extent possible, and any
additional amount needed shall be contributed by the Employer. The
Employee shall then be fully vested in his or her restored Account.
18
9 PARTICIPANT LOANS
-----------------
9.1 Participant Loans Permitted
Loans to Participants are permitted pursuant to the terms and
conditions set forth in this Section.
9.2 Loan Application, Note and Security
A Participant shall apply for any loan in such manner and with such
advance notice as prescribed by the Administrator. All loans shall be
evidenced by a promissory note, secured only by the portion of the
Participant's Account from which the loan is made, and the Plan shall
have a lien on this portion of his or her Account.
9.3 Spousal Consent
A Participant is required to obtain Spousal Consent in order to take
out a loan under the Plan.
9.4 Loan Approval
The Administrator, or the Trustee if otherwise authorized by the
Administrator and expressly agreed to by the Trustee, is responsible
for determining that a loan request conforms to the requirements
described in this Section and granting such request.
9.5 Loan Funding Limits
The loan amount must meet all of the following limits as determined as
of the Sweep Date the loan is processed:
(a) Plan Minimum Limit. The minimum amount for any loan is $1,000.
Effective April 1, 1992, the minimum amount for any loan is
$500.
(b) Plan Maximum Limit. Subject to the legal limit described in (c)
below, the maximum a Participant may borrow, including the
outstanding balance of existing Plan loans, is 100% of the
following Accounts which are fully vested:
Pre-Tax Account
Matching Account
Prior Plan Account
Rollover Account
After-Tax Account
19
(c) Legal Maximum Limit. The maximum a Participant may borrow,
including the outstanding balance of existing Plan loans, is 50%
of his or her vested Account balance, not to exceed $50,000.
However, the $50,000 maximum is reduced by the Participant's
highest outstanding loan balance during the 12 month period
ending on the day before the Sweep Date as of which the loan is
made. For purposes of this paragraph, the qualified plans of
all Related Companies shall be treated as though they are part
of this Plan to the extent it would decrease the maximum loan
amount.
9.6 Maximum Number of Loans
A Participant may have only one loan outstanding at any given time.
9.7 Source and Timing of Loan Funding
A loan to a Participant shall be made solely from the assets of his or
her own Accounts. The available assets shall be determined first by
Account type and then by investment type within each type of Account.
The hierarchy for loan funding by type of Account shall be the order
listed in the preceding Plan Maximum Limit paragraph. Within each
Account used for funding a loan, amounts shall first be taken from the
Sweep Account and then taken by type of investment in direct
proportion to the market value of the Participant's interest in each
Investment Fund as of the Trade Date on which the loan is processed.
Loans will be funded on the Settlement Date following the Trade Date
as of which the loan is processed. The Trustee shall make payment to
the Participant as soon thereafter as administratively feasible.
9.8 Interest Rate
The interest rate charged on Participant loans shall be a fixed
reasonable rate of interest, determined from time to time by the
Administrator, which provides the Plan with a return commensurate with
the prevailing interest rate charged by persons in the business of
lending money for loans which would be made under similar
circumstances. As of the Effective Date, the interest rate is
determined as set forth in Appendix C, and may be changed from time to
time, without the necessity of amending this Plan and Trust document.
9.9 Repayment
Substantially level amortization shall be required of each loan with
payments made at least monthly, generally through payroll deduction.
Loans may be prepaid in full or in part at any time. The Participant
may choose the loan repayment period, not to exceed five years.
20
9.10 Repayment Hierarchy
Loan principal repayments shall be credited to the Participant's
Accounts in the inverse of the order used to fund the loan. Loan
interest shall be credited to the Participant's Accounts in direct
proportion to the principal payment. Loan payments are credited by
investment type based upon the Participant's current investment
election for new Contributions.
9.11 Repayment Suspension
The Administrator may agree to a suspension of loan payments for up to
12 months for a Participant who is on a Leave of Absence. During the
suspension period interest shall continue to accrue on the outstanding
loan balance. At the expiration of the suspension period all
outstanding loan payments and accrued interest thereon shall be due
unless otherwise agreed upon by the Administrator.
9.12 Loan Default
A loan is treated as a default if scheduled loan payments are more
than 90 days late. A Participant shall then have 30 days from the
time he or she receives written notice of the default and a demand for
past due amounts to cure the default before it becomes final.
In the event of default, the Administrator may direct the Trustee to
report the default as a taxable distribution. As soon as a Plan
withdrawal or distribution to such Participant would otherwise be
permitted, the Administrator may instruct the Trustee to execute upon
its security interest in the Participant's Account by distributing the
note to the Participant.
9.13 Call Feature
The Administrator shall have the right to call any Participant loan
once a Participant's employment with all Related Companies has
terminated or if the Plan is terminated.
21
10 IN-SERVICE WITHDRAWALS
----------------------
10.1 In-Service Withdrawals Permitted
In-service withdrawals to a Participant who is an Employee are
permitted pursuant to the terms and conditions set forth in this
Section and as required by law as set forth in Section 11.5.
10.2 In-Service Withdrawal Application and Notice
A Participant shall apply for any in-service withdrawal in such manner
and with such advance notice as prescribed by the Administrator.
Effective for in-service withdrawals applied for after December 31,
1992, the Participant shall be provided the notice prescribed by Code
section 402(f).
If an in-service withdrawal is one to which Code sections 401(a)(11)
and 417 do not apply, such in-service withdrawal may commence less
than 30 days after the aforementioned notice is provided, if:
(a) the Participant is clearly informed that he or she has the right
to a period of at least 30 days after receipt of such notice to
consider his or her option to elect or not elect a Direct
Rollover for the portion, if any, of his or her in-service
withdrawal which will constitute an Eligible Rollover
Distribution; and
(b) the Participant after receiving such notice, affirmatively
elects a Direct Rollover for the portion, if any, of his or her
in-service withdrawal which will constitute an Eligible Rollover
Distribution or alternatively elects to have such portion made
payable directly to him or her, thereby not electing a Direct
Rollover.
10.3 Spousal Consent
A Participant is required to obtain Spousal Consent in order to make
an in-service withdrawal under the Plan. Effective January 1, 1995, a
Participant is not required to obtain Spousal Consent in order to make
an in-service withdrawal under the Plan.
10.4 In-Service Withdrawal Approval
The Administrator, or the Trustee if otherwise authorized by the
Administrator and expressly agreed to by the Trustee, is responsible
for determining that an in-service withdrawal request conforms to the
requirements described in this Section and granting such request.
10.5 Minimum Amount, Payment Form and Medium
There is no minimum amount for any type of withdrawal.
22
For withdrawals made after December 31, 1992, with regard to the
portion of a withdrawal representing an Eligible Rollover
Distribution, a Participant may elect a Direct Rollover. The form of
payment for an in-service withdrawal shall be a single lump sum and
payment shall be made in cash.
10.6 Source and Timing of In-Service Withdrawal Funding
An in-service withdrawal to a Participant shall be made solely from
the assets of his or her own Accounts and will be based on the Account
values as of the Trade Date the in-service withdrawal is processed.
The available assets shall be determined first by Account type and
then by investment type within each type of Account. Within each
Account used for funding an in-service withdrawal, amounts shall first
be taken from the Sweep Account and then taken by type of investment
in direct proportion to the market value of the Participant's interest
in each Investment Fund (which excludes Participant loans) as of the
Trade Date on which the in-service withdrawal is processed.
In-Service withdrawals will be funded on the Settlement Date following
the Trade Date as of which the in-service withdrawal is processed.
The Trustee shall make payment as soon thereafter as administratively
feasible.
10.7 Hardship Withdrawals
No in-service withdrawals are permitted from a Participant's Account
because of hardship.
Effective April 1, 1992, withdrawals are permitted from a
Participant's Account because of hardship.
(a) Requirements. A Participant who is an Employee may request the
withdrawal of up to the amount necessary to satisfy a financial
need including amounts necessary to pay any federal, state or
local income taxes or penalties reasonably anticipated to result
from the withdrawal. Only requests for withdrawals (1) on
account of a Participant's "Deemed Financial Need", and (2)
which are "Deemed Necessary" to satisfy the financial need will
be approved.
(b) "Deemed Financial Need". Financial commitments relating to:
(1) the payment of unreimbursable medical expenses described
under Code section 213(d) incurred (or to be incurred) by
the Employee, his or her spouse or dependents;
(2) the purchase (excluding mortgage payments) of the
Employee's principal residence;
(3) the payment of unreimbursable tuition and related
educational fees for up to the next 12 months of post-
secondary education for the Employee, his or her spouse or
dependents;
23
(4) the payment of amounts necessary for the Employee to
prevent losing his or her principal residence through
eviction or foreclosure on the mortgage; or
(5) any other circumstance specifically permitted under Code
section 401(k)(2)(B)(i)(IV).
(c) "Deemed Necessary". A withdrawal is "deemed necessary" to
satisfy the financial need only if the withdrawal amount does
not exceed the financial need and all of these conditions are
met:
(1) the Employee has obtained all other possible withdrawals
and nontaxable loans available from all plans maintained by
Related Companies;
(2) the Administrator shall suspend the Employee from making
any contributions to this Plan, all other qualified and
nonqualified plans of deferred compensation and all stock
option or stock purchase plans maintained by Related
Companies for 12 months from the date the withdrawal
payment is made; and
(3) the Administrator shall reduce the Contribution Dollar
Limit for the Employee for the calendar year next following
the calendar year of the withdrawal by the amount of the
Employee's Pre-Tax Contributions for the calendar year of
the withdrawal.
(d) Account Sources for Withdrawal. All available amounts must
first be withdrawn from a Participant's After-Tax Account. The
remaining withdrawal amount shall come only from the
Participant's fully vested Accounts, in the following priority
order:
Rollover Account
Matching Account
Prior Plan Account
Pre-Tax Account
The amount that may be withdrawn from a Participant's Pre-Tax
Account shall not include any earnings credited to his or her
Pre-Tax Contribution Account after the start of the first Plan
Year beginning after December 31, 1988.
(e) Permitted Frequency. There is no restriction on the number of
Hardship withdrawals permitted to a Participant.
10.8 After-Tax Account Withdrawals
(a) Requirements. A Participant who is an Employee may withdraw up
to the entire balance from his or her After-Tax Account.
24
(b) Permitted Frequency. There is no restriction on the number of
After-Tax Account withdrawals permitted to a Participant.
(c) Suspension from Further Contributions. An After-Tax Account
withdrawal shall not affect a Participant's ability to make or
be eligible to receive further Contributions.
10.9 Rollover Account Withdrawals
No in-service withdrawals are permitted from a Participant's Rollover
Account except as provided elsewhere in this Section.
Effective April 1, 1992, withdrawals from a Participant's Rollover
Account are permitted.
(a) Requirements. A Participant who is an Employee may withdraw up
to the entire balance from his or her Rollover Account.
(b) Permitted Frequency. There is no restriction on the number of
Rollover Account withdrawals permitted to a Participant.
(c) Suspension from Further Contributions. A Rollover Account
withdrawal shall not affect a Participant's ability to make or
be eligible to receive further Contributions.
10.10 Over Age 59 1/2 Withdrawals
(a) Requirements. A Participant who is an Employee and over age 59
1/2 may withdraw from the Accounts listed in paragraph (b)
below.
(b) Account Sources for Withdrawal. The withdrawal amount shall
come only from the Participant's fully vested Accounts, in the
following priority order with the exception that the Participant
may instead choose to have amounts taken from his or her After-
Tax Account first, and except that prior to December 1, 1990, a
Participant's Pre-Tax Account preceded his or her Rollover
Account in the priority order:
Rollover Account
Pre-Tax Account
Matching Account
Prior Plan Account
After-Tax Account
(c) Permitted Frequency. The maximum number of Over Age 59 1/2
withdrawals permitted to a Participant in any 12-month period is
one.
(d) Suspension from Further Contributions. An Over Age 59 1/2
withdrawal shall not affect a Participant's ability to make or
be eligible to receive further Contributions.
25
11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR AS REQUIRED BY LAW
---------------------------------------------------------
11.1 Benefit Information, Notices and Election
A Participant, or his or her Beneficiary in the case of his or her
death, shall be provided with information regarding all optional times
and forms of distribution available, to include the notices prescribed
by Code section 402(f), effective January 1, 1993, and Code section
411(a)(11). Subject to the other requirements of this Section, a
Participant, or his or her Beneficiary in the case of his or her
death, may elect, in such manner and with such advance notice as
prescribed by the Administrator, to have his or her vested Account
balance paid to him or her beginning upon any Settlement Date
following the Participant's termination of employment with all Related
Companies or, if earlier, at the time required by law as set forth in
Section 11.5.
If a distribution is one to which Code sections 401(a)(11) and 417 do
not apply, such distribution may commence less than 30 days after the
aforementioned notices are provided, if:
(a) the Participant is clearly informed that he or she has the right
to a period of at least 30 days after receipt of such notices to
consider the decision as to whether to elect a distribution and
if so to elect a particular form of distribution and to elect or
not elect a Direct Rollover for all or a portion, if any, of his
or her distribution which will constitute an Eligible Rollover
Distribution; and
(b) the Participant after receiving such notice, affirmatively
elects a distribution and a Direct Rollover for all or a
portion, if any, of his or her distribution which will
constitute an Eligible Rollover Distribution or alternatively
elects to have all or a portion made payable directly to him or
her, thereby not electing a Direct Rollover for all or a portion
thereof.
11.2 Spousal Consent
A Participant is required to obtain Spousal Consent in order to
receive a distribution under the Plan. Effective January 1, 1995, a
Participant is not required to obtain Spousal Consent in order to
receive a distribution under the Plan.
11.3 Payment Form and Medium
A Participant may elect to be paid in any of these forms:
(a) a single lump sum, or
(b) effective January 1, 1993, a portion paid in a lump sum, and the
remainder paid later, or
(c) periodic installments over a period not to exceed the life
expectancy of the Participant and his or her Beneficiary.
26
Distributions shall generally be made in cash. For distributions made
after December 31, 1992, with regard to the portion of a distribution
representing an Eligible Rollover Distribution, a Distributee may
elect a Direct Rollover for all or a portion of such amount.
11.4 Source and Timing of Distribution Funding
A distribution to a Participant shall be made solely from the assets
of his or her own Accounts and will be based on the Account values as
of the Trade Date the distribution is processed. The available assets
shall be determined first by Account type and then by investment type
within each type of Account. Within each Account used for funding a
distribution, amounts shall first be taken from the Sweep Account and
then taken by type of investment in direct proportion to the market
value of the Participant's interest in each Investment Fund as of the
Trade Date on which the distribution is processed.
Distributions will be funded on the Settlement Date following the
Trade Date as of which the distribution is processed. The Trustee
shall make payment as soon thereafter as administratively feasible.
11.5 Latest Commencement Permitted
In addition to any other Plan requirements and unless a Participant
elects otherwise, his or her benefit payments will begin not later
than 60 days after the end of the Plan Year in which he or she attains
his or her Normal Retirement Date or retires, whichever is later.
However, if the amount of the payment or the location of the
Participant (after a reasonable search) cannot be ascertained by that
deadline, payment shall be made no later than 60 days after the
earliest date on which such amount or location is ascertained but in
no event later than as described below.
Benefit payments shall begin by the April 1 immediately following the
end of the calendar year in which the Participant attains age 70 1/2
(whether or not he or she is an Employee), except that distribution
for an Employee who was born before July 1, 1917 does not need to
begin until his or her employment with all Related Companies ends.
11.6 Payment Within Life Expectancy
The Participant's payment election must be consistent with the
requirement of Code section 401(a)(9) that all payments are to be
completed within a period not to exceed the lives or the joint and
last survivor life expectancy of the Participant and his or her
Beneficiary. The life expectancies of a Participant and his or her
Beneficiary, if such Beneficiary is his or her spouse, may be
recomputed annually
11.7 Incidental Benefit Rule
The Participant's payment election must be consistent with the
requirement that, if the Participant's spouse is not his or her sole
primary Beneficiary, the
27
minimum annual distribution for each calendar year, beginning with the
year in which he or she attains age 70 1/2 (or such later date as
provided otherwise in Section 11), shall not be less than the quotient
obtained by dividing (a) the Participant's vested Account balance as
of the last Trade Date of the preceding year by (b) the applicable
divisor as determined under the incidental benefit requirements of
Code section 401(a)(9).
11.8 Payment to Beneficiary
Payment to a Beneficiary must either: (1) be completed by the end of
the calendar year that contains the fifth anniversary of the
Participant's death or (2) begin by the end of the calendar year that
contains the first anniversary of the Participant's death and be
completed within the period of the Beneficiary's life or life
expectancy, except that:
(a) If the Participant dies after the April 1 immediately following
the end of the calendar year in which he or she attains age 70
1/2, payment to his or her Beneficiary must be made at least as
rapidly as provided in the Participant's distribution election;
(b) If the surviving spouse is the Beneficiary, payments need not
begin until the end of the calendar year in which the
Participant would have attained age 70 1/2 and must be completed
within the spouse's life or life expectancy; and
(c) If the Participant and the surviving spouse who is the
Beneficiary die (1) before the April 1 immediately following the
end of the calendar year in which the Participant would have
attained age 70 1/2 and (2) before payments have begun to the
spouse, the spouse will be treated as the Participant in
applying these rules.
11.9 Beneficiary Designation
Each Participant may complete a beneficiary designation form
indicating the Beneficiary who is to receive the Participant's
remaining Plan interest at the time of his or her death. The
designation may be changed at any time. However, a Participant's
spouse shall be the sole primary Beneficiary unless the designation
includes Spousal Consent for another Beneficiary. If no proper
designation is in effect at the time of a Participant's death or if
the Beneficiary does not survive the Participant, the Beneficiary
shall be, in the order listed, the:
(a) Participant's surviving spouse,
(b) Participant's children, in equal shares, per stirpes (by right
-----------
of representation), or
(c) Participant's estate.
28
12 ADP AND ACP TESTS
-----------------
12.1 Contribution Limitation Definitions
The following definitions are applicable to this Section 12 (where a
definition is contained in both Sections 1 and 12, for purposes of
Section 12 the Section 12 definition shall be controlling):
(a) "ACP" or "Average Contribution Percentage". The Average
Percentage calculated using Contributions allocated to
Participants as of a date within the Plan Year.
(b) "ACP Test". The determination of whether the ACP is in
compliance with the Basic or Alternative Limitation for a Plan
Year (as defined in Section 12.2).
(c) "ADP" or "Average Deferral Percentage". The Average Percentage
calculated using Deferrals allocated to Participants as of a
date within the Plan Year.
(d) "ADP Test". The determination of whether the ADP is in
compliance with the Basic or Alternative Limitation for a Plan
Year (as defined in Section 12.2).
(e) "Average Percentage". The average of the calculated percentages
for Participants within the specified group. The calculated
percentage refers to either the "Deferrals" or "Contributions"
(as defined in this Section) made on each Participant's behalf
for the Plan Year, divided by his or her Compensation for the
portion of the Plan Year in which he or she was an Eligible
Employee while a Participant. (Pre-Tax Contributions which will
be refunded solely because they exceed the Contribution Dollar
Limit are included in the percentage for the HCE Group but not
for the NHCE Group if such excess Pre-Tax Contributions were
made to plans of Related Companies.)
(f) "Contributions" shall include Matching Contributions. In
addition, Contributions may include Pre-Tax Contributions, but
only to the extent that (1) the Employer elects to use them, (2)
they are not used or counted in the ADP Test, and (3) they are
necessary to meet the ACP Test Alternative Limitation (defined
in Section 12.2 (b)) or the Multiple Use Test.
(g) "Deferrals" shall include Pre-Tax Contributions. In addition,
for Plan Years ending on or before December 31, 1991, Deferrals
may include Matching Contributions, but only to the extent that
(1) the Employer elects to use them, (2) they are not used or
counted in the ACP Test, and (3) such Contributions are fully
vested when made and not withdrawable by an Employee before he
or she attains age 59 1/2.
29
(h) "Family Member". An Employee who is, at any time during the
Plan Year or Lookback Year, a spouse, lineal ascendant or
descendant, or spouse of a lineal ascendant or descendant of (1)
an active or former Employee who at any time during Plan Year or
Lookback Year is a more than 5% Owner (within the meaning of
Code section 414(q)(3)), or (2) an HCE who is among the 10
Employees with the highest Compensation for such Year.
(i) "HCE" or "Highly Compensated Employee". With respect to each
Employer and its Related Companies, an Employee during the Plan
Year or Lookback Year who (in accordance with Code section
414(q)):
(1) Was a more than 5% Owner at any time during the Lookback
Year or Plan Year;
(2) Received Compensation during the Lookback Year (or in the
Plan Year if among the 100 Employees with the highest
Compensation for such Year) in excess of (i) $75,000 (as
adjusted for such Year pursuant to Code sections 414(q)(1)
and 415(d)), or (ii) $50,000 (as adjusted for such Year
pursuant to Code sections 414(q)(1) and 415(d)) in the case
of a member of the "top-paid group" (within the meaning of
Code section 414(q)(4)) for such Year), provided, however,
that if the conditions of Code section 414(q)(12)(B)(ii)
are met, the Company may elect for any Plan Year to apply
clause (i) by substituting $50,000 for $75,000 and not to
apply clause (ii);
(3) Was an officer of a Related Company and received
Compensation during the Lookback Year (or in the Plan Year
if among the 100 Employees with the highest Compensation
for such Year) that is greater than 50% of the dollar
limitation in effect under Code section 415(b)(1)(A) and
(d) for such Year (or if no officer has Compensation in
excess of the threshold, the officer with the highest
Compensation), provided that the number of officers shall
be limited to 50 Employees (or, if less, the greater of
three Employees or 10% of the Employees); or
(4) Was a Family Member at any time during the Lookback Year or
Plan Year, in which case the Contributions and Compensation
of the HCE and his or her Family Members shall be
aggregated and they shall be treated as a single HCE.
A former Employee shall be treated as an HCE if (1) such former
Employee was an HCE when he separated from service, or (2) such
former Employee was an HCE in service at any time after
attaining age 55.
30
The determination of who is an HCE, including the determinations
of the number and identity of Employees in the top-paid group,
the top 100 Employees and the number of Employees treated as
officers shall be made in accordance with Code section 414(q).
(j) "HCE Group" and "NHCE Group". With respect to each Employer and
its Related Companies, the respective group of HCEs and NHCEs
who are eligible to have amounts contributed on their behalf for
the Plan Year, including Employees who would be eligible but for
their election not to participate or to contribute, or because
their Pay is greater than zero but does not exceed a stated
minimum.
(1) If the Related Companies maintain two or more plans which
are subject to the ADP or ACP Test and are considered as
one plan for purposes of Code sections 401(a)(4) or 410(b),
all such plans shall be aggregated and treated as one plan
for purposes of meeting the ADP and ACP Tests, provided
that, for Plan Years beginning after December 31, 1989,
plans may only be aggregated if they have the same Plan
Year.
(2) If an HCE, who is one of the top 10 paid Employees or a
more than 5% Owner, has any Family Members, the Deferrals,
Contributions and Compensation of such HCE and his or her
Family Members shall be combined and treated as a single
HCE. Such amounts for all other Family Members shall be
removed from the NHCE Group percentage calculation and be
combined with the HCE's.
(3) If an HCE is covered by more than one cash or deferred
arrangement maintained by the Related Companies, all such
plans shall be aggregated and treated as one plan for
purposes of calculating the separate percentage for the HCE
which is used in the determination of the Average
Percentage.
(4) Employees who are eligible to participate in the Plan as a
result of a collective bargaining agreement shall be
excluded from both the HCE and NHCE Groups for Plan Years
beginning before January 1, 1993.
(k) "Lookback Year". Pursuant to Code section 414(q), the Company
elects as the Lookback Year the 12 months ending immediately
prior to the start of the Plan Year.
(l) "Multiple Use Test". The test described in Section 12.4 which a
Plan must meet where the Alternative Limitation (described in
Section 12.2(b)) is used to meet both the ADP and ACP Tests.
31
(m) "NHCE" or "Non-Highly Compensated Employee". An Employee who is
not an HCE.
12.2 ADP and ACP Tests
For each Plan Year, the ADP and ACP for the HCE Group must meet either
the Basic or Alternative Limitation when compared to the respective
ADP and ACP for the NHCE Group, defined as follows:
(a) Basic Limitation. The HCE Group Average Percentage may not
exceed 1.25 times the NHCE Group Average Percentage.
(b) Alternative Limitation. The HCE Group Average Percentage is
limited by reference to the NHCE Group Average Percentage as
follows:
If the NHCE Group Then the Maximum HCE
Average Percentage is: Group Average Percentage is:
------------------------ -----------------------------
Less than 2% 2 times NHCE Group Average %
2% to 8% NHCE Group Average % plus 2%
More than 8% NA - Basic Limitation applies
12.3 Correction of ADP and ACP Tests
If the ADP or ACP Tests are not met, the Administrator shall
determine, no later than the end of the next Plan Year, a maximum
percentage to be used in place of the calculated percentage for all
HCEs that would reduce the ADP and/or ACP for the HCE group by a
sufficient amount to meet the ADP and ACP Tests.
(a) ADP Correction. Pre-Tax Contributions shall, by the end of the
next Plan Year, be refunded (including amounts previously
refunded because they exceeded the Contribution Dollar Limit) to
the Participant in an amount equal to the actual Deferrals minus
the product of the maximum percentage and the HCE's
Compensation. Any Matching Contributions attributable to
refunded excess Pre-Tax Contributions as described in this
Section 12.3(a) shall be deemed a Contribution made by reason of
a mistake of fact and removed from the Participant's Account.
(b) ACP Correction. Matching Contributions shall, by the end of the
next Plan Year, be refunded to the Participant in an amount
equal to the actual Contributions minus the product of the
maximum percentage and the HCE's Compensation.
(c) Investment Fund Sources. Once the amount of excess Deferrals
and/or Contributions is determined amounts shall then be taken
by type of
32
investment in direct proportion to the market value of the
Participant's interest in each Investment Fund (which excludes
Participant loans) at the time the correction is made.
(d) Family Member Correction. To the extent any reduction is
necessary with respect to an HCE and his or her Family Members
that have been combined and treated for testing purposes as a
single Employee, the excess Deferrals and Contributions from the
ADP and/or ACP Test shall be prorated among each such
Participant in direct proportion to his or her Deferrals or
Contributions included in each Test.
12.4 Multiple Use Test
If the Alternative Limitation (defined in Section 12.2) is used to
meet both the ADP and ACP Tests, the ADP and ACP for the HCE Group
must also comply with the requirements of Code section 401(m)(9). Such
Code section requires that the sum of the ADP and ACP for the HCE
Group (as determined after any corrections needed to meet the ADP and
ACP Tests have been made) not exceed the sum (which produces the most
favorable result) of:
(a) the Basic Limitation (defined in Section 12.2) applied to either
the ADP or ACP for the NHCE Group, and
(b) the Alternative Limitation applied to the other NHCE Group
percentage.
12.5 Correction of Multiple Use Test
If the multiple use limit is exceeded, the Administrator shall
determine a maximum percentage to be used in place of the calculated
percentage for all HCEs that would reduce either or both the ADP or
ACP for the HCE Group by a sufficient amount to meet the multiple use
limit. Any excess shall be handled in the same manner that the
distribution of excess Deferrals or Contributions are handled.
12.6 Adjustment for Investment Gain or Loss
Any excess Deferrals or Contributions to be refunded to a Participant
in accordance with Section 12.3 or 12.5 shall be adjusted for
investment gain or loss. Refunds shall not include investment gain or
loss for the period between the end of the applicable Plan Year and
the date of distribution. However, for Plan Years ending before
December 31, 1993, refunds shall include investment gain or loss for
the period between the end of the applicable Plan Year and the date of
distribution.
33
12.7 Testing Responsibilities and Required Records
The Administrator shall be responsible for ensuring that the Plan
meets the ADP, ACP and Multiple Use Tests and that the Contribution
Dollar Limit is not exceeded. In carrying out its responsibilities,
the Administrator shall have sole discretion to limit or reduce
Deferrals or Contributions at any time. The Administrator shall
maintain records which are sufficient to demonstrate that the ADP, ACP
and Multiple Use Tests have been met for each Plan Year for at least
as long as the Employer's corresponding tax year is open to audit.
12.8 Separate Testing
(a) Multiple Employers: The determination of HCEs, NHCEs, and the
performance of the ADP, ACP and Multiple Use Tests and any
corrective action resulting therefrom shall be made separately
with regard to the Employees of each Employer (and its Related
Companies) that is not a Related Company with the other
Employer(s).
(b) Collective Bargaining Units: For Plan Years beginning after
December 31, 1992, the performance of the testing and any
corrective action resulting therefrom shall be applied
separately to Employees who are eligible to participate in the
Plan as a result of a collective bargaining agreement.
In addition, separate testing may be applied, at the discretion of the
Administrator and to the extent permitted under Treasury regulations,
to any group of Employees for whom separate testing is permissible.
34
13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS
--------------------------------------------
13.1 "Annual Addition" Defined
The sum of all amounts allocated to the Participant's Account for a
Plan Year. Amounts include contributions (except for rollovers or
transfers from another qualified plan), forfeitures and, if the
Participant is a Key Employee (pursuant to Section 14) for the
applicable or any prior Plan Year, medical benefits provided pursuant
to Code section 419A(d)(1). For purposes of this Section 13.1,
"Account" also includes a Participant's account in all other defined
contribution plans currently or previously maintained by any Related
Company. The Plan Year refers to the year to which the allocation
pertains, regardless of when it was allocated. The Plan Year shall be
the Code section 415 limitation year.
13.2 Maximum Annual Addition
The Annual Addition to a Participant's accounts under this Plan and
any other defined contribution plan maintained by any Related Company
for any Plan Year shall not exceed the lesser of (1) 25% of his or her
Taxable Income or (2) the greater of $30,000 or one-quarter of the
dollar limitation in effect under Code section 415(b)(1)(A).
13.3 Avoiding an Excess Annual Addition
If, at any time during a Plan Year, the allocation of any additional
Contributions would produce an excess Annual Addition for such year,
Contributions to be made for the remainder of the Plan Year shall be
limited to the amount needed for each affected Participant to receive
the maximum Annual Addition.
13.4 Correcting an Excess Annual Addition
Upon the discovery of an excess Annual Addition to a Participant's
Account (resulting from forfeitures, allocations, reasonable error in
determining Participant compensation or the amount of elective
contributions, or other facts and circumstances acceptable to the
Internal Revenue Service) the excess amount (adjusted to reflect
investment gains) shall first be returned to the Participant to the
extent of his or her Pre-Tax Contributions (however to the extent Pre-
Tax Contributions were matched, the applicable Matching Contributions
shall be forfeited in proportion to the returned matched Pre-Tax
Contributions) and the remaining excess, if any, plus returned
Matching Contributions, shall be forfeited by the Participant and used
to reduce subsequent Contributions as soon as is administratively
feasible.
35
13.5 Correcting a Multiple Plan Excess
If a Participant, whose Account is credited with an excess Annual
Addition, received allocations to more than one defined contribution
plan, the excess shall be corrected by reducing the Annual Addition to
this Plan only after all possible reductions have been made to the
other defined contribution plans.
13.6 "Defined Benefit Fraction" Defined
The fraction, for any Plan Year, where the numerator is the "projected
annual benefit" and the denominator is the greater of 125% of the
"protected current accrued benefit" or the normal limit which is the
lesser of (1) 125% of the maximum dollar limitation provided under
Code section 415(b)(1)(A) for the Plan Year or (2) 140% of the amount
which may be taken into account under Code section 415(b)(1)(B) for
the Plan Year, where a Participant's:
(a) "projected annual benefit" is the annual benefit provided by the
Plan determined pursuant to Code section 415(e)(2)(A), and
(b) "protected current accrued benefit" in a defined benefit plan in
existence (1) on July 1, 1982, shall be the accrued annual
benefit provided for under Public Law 97-248, section 235(g)(4),
as amended, or (2) on May 6, 1986, shall be the accrued annual
benefit provided for under Public Law 99-514, section
1106(i)(3).
13.7 "Defined Contribution Fraction" Defined
The fraction where the numerator is the sum of the Participant's
Annual Addition for each Plan Year to date and the denominator is the
sum of the "annual amounts" for each year in which the Participant has
performed service with a Related Company. The "annual amount" for any
Plan Year is the lesser of (1) 125% of the Code section 415(c)(1)(A)
dollar limitation (determined without regard to subsection (c)(6)) in
effect for the Plan Year and (2) 140% of the Code section 415(c)(1)(B)
amount in effect for the Plan Year, where:
(a) each Annual Addition is determined pursuant to the Code section
415(c) rules in effect for such Plan Year, and
(b) the numerator is adjusted pursuant to Public Law 97-248, section
235(g)(3), as amended, or Public Law 99-514, section 1106(i)(4).
13.8 Combined Plan Limits and Correction
If a Participant has also participated in a defined benefit plan
maintained by a Related Company, the sum of the Defined Benefit
Fraction and the Defined Contribution Fraction for any Plan Year may
not exceed 1.0. If the combined fraction exceeds 1.0 for any Plan
Year, the Participant's benefit under any defined benefit plan (to the
extent it has not been distributed or used to purchase an annuity
contract) shall be limited so that the combined fraction does not
exceed 1.0 before any defined contribution limits will be enforced.
36
14 TOP HEAVY RULES
---------------
14.1 Top Heavy Definitions
When capitalized, the following words and phrases have the following
meanings when used in this Section:
(a) "Aggregation Group". The group consisting of each qualified
plan of an Employer (and its Related Companies) (1) in which a
Key Employee is a participant or was a participant during the
determination period (regardless of whether such plan has
terminated), or (2) which enables another plan in the group to
meet the requirements of Code sections 401(a)(4) and 410(b).
The Employer may also treat any other qualified plan as part of
the group if the group would continue to meet the requirements
of Code sections 401(a)(4) and 410(b) with such plan being taken
into account.
(b) "Determination Date". The last Trade Date of the preceding Plan
Year or, in the case of the Plan's first year, the last Trade
Date of the first Plan Year.
(c) "Key Employee". A current or former Employee (or his or her
Beneficiary) who at any time during the five year period ending
on the Determination Date was:
(1) an officer of a Related Company whose Compensation (i)
exceeds 50% of the amount in effect under Code section
415(b)(1)(A) and (ii) places him within the following
highest paid group of officers:
Number of Employees Number of
not Excluded Under Code Highest Paid
Section 414(q)(8) Officers Included
----------------- -----------------
Less than 30 3
30 to 500 10% of the number of
Employees not excluded
under Code section
414(q)(8)
More than 500 50
(2) a more than 5% Owner,
(3) a more than 1% Owner whose Compensation exceeds $150,000,
or
37
(4) a more than 0.5% Owner who is among the 10 Employees owning
the largest interest in a Related Company and whose
Compensation exceeds the amount in effect under Code
section 415(c)(1)(A).
(d) "Plan Benefit". The sum as of the Determination Date of (1) an
Employee's Account, (2) the present value of his or her other
accrued benefits provided by all qualified plans within the
Aggregation Group, and (3) the aggregate distributions made
within the five year period ending on such date. Plan Benefits
shall exclude rollover contributions and plan to plan transfers
made after December 31, 1983 which are both employee initiated
and from a plan maintained by a non-related employer.
(e) "Top Heavy". The Plan's status when the Plan Benefits of Key
Employees account for more than 60% of the Plan Benefits of all
Employees who have performed services at any time during the
five year period ending on the Determination Date. The Plan
Benefits of Employees who were, but are no longer, Key Employees
(because they have not been an officer or Owner during the five
year period), are excluded in the determination.
14.2 Special Contributions
(a) Minimum Contribution Requirement. For each Plan Year in which
the Plan is Top Heavy, the Employer shall not allow any
contributions (other than a Rollover Contribution) to be made by
or on behalf of any Key Employee unless the Employer makes a
contribution (other than Pre-Tax and Matching Contributions) on
behalf of all Participants who were Eligible Employees as of the
last day of the Plan Year in an amount equal to at least 3% of
each such Participant's Taxable Income. The Administrator shall
remove any such contributions (including applicable investment
gain or loss) credited to a Key Employee's Account in violation
of the foregoing rule and return them to the Employer or
Employee to the extent permitted by the Limited Return of
Contributions paragraph of Section 18.
(b) Overriding Minimum Benefit. Notwithstanding, contributions shall
be permitted on behalf of Key Employees if the Employer also
maintains a defined benefit plan which automatically provides a
benefit which satisfies the Code section 416(c)(1) minimum
benefit requirements, including the adjustment provided in Code
section 416(h)(2)(A), if applicable. If this Plan is part of an
aggregation group in which a Key Employee is receiving a benefit
and no minimum is provided in any other plan, a minimum
contribution of at least 3% of Taxable Income shall be provided
to the Employees specified in the preceding paragraph of this
plan. In addition, the Employer may offset a defined benefit
minimum by contributions (other than Pre-Tax and Matching
Contributions) made to this Plan.
38
14.3 Adjustment to Combined Limits for Different Plans
For each Plan Year in which the Plan is Top Heavy, 100% shall be
substituted for 125% in determining the Defined Benefit Fraction and
the Defined Contribution Fraction.
39
15 PLAN ADMINISTRATION
-------------------
15.1 Plan Delineates Authority and Responsibility
Plan fiduciaries include the Company, the Administrator, the Committee
and/or the Trustee, as applicable, whose specific duties are
delineated in this Plan and Trust. In addition, Plan fiduciaries also
include any other person to whom fiduciary duties or responsibility is
delegated with respect to the Plan. Any person or group may serve in
more than one fiduciary capacity with respect to the Plan. To the
extent permitted under ERISA section 405, no fiduciary shall be liable
for a breach by another fiduciary.
15.2 Fiduciary Standards
Each fiduciary shall:
(a) discharge his or her duties in accordance with this Plan and
Trust to the extent they are consistent with ERISA;
(b) use that degree of care, skill, prudence and diligence that a
prudent person acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character and with like aims;
(c) act with the exclusive purpose of providing benefits to
Participants and their Beneficiaries, and defraying reasonable
expenses of administering the Plan;
(d) diversify Plan investments, to the extent such fiduciary is
responsible for directing the investment of Plan assets, so as
to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so; and
(e) treat similarly situated Participants and Beneficiaries in a
uniform and nondiscriminatory manner.
15.3 Company is ERISA Plan Administrator
The Company is the plan administrator, within the meaning of ERISA
section 3(16), which is responsible for compliance with all reporting
and disclosure requirements, except those that are explicitly the
responsibility of the Trustee under applicable law. The Administrator
and/or Committee shall have any necessary authority to carry out such
functions through the actions of the Administrator, duly appointed
officers of the Company, and/or the Committee.
40
15.4 Administrator Duties
The Administrator shall have the discretionary authority to construe
this Plan and Trust, other than the provisions which relate to the
Trustee, and to do all things necessary or convenient to effect the
intent and purposes of the Plan, whether or not such powers are
specifically set forth in this Plan and Trust. Actions taken in good
faith by the Administrator shall be conclusive and binding on all
interested parties, and shall be given the maximum possible deference
allowed by law. In addition to the duties listed elsewhere in this
Plan and Trust, the Administrator's authority shall include, but not
be limited to, the discretionary authority to:
(a) determine who is eligible to participate, if a contribution
qualifies as a rollover contribution, the allocation of
Contributions, and the eligibility for loans, withdrawals and
distributions;
(b) provide each Participant with a summary plan description no
later than 90 days after he or she has become a Participant (or
such other period permitted under ERISA section 104(b)(1)), as
well as informing each Participant of any material modification
to the Plan in a timely manner;
(c) make a copy of the following documents available to Participants
during normal work hours: this Plan and Trust (including
subsequent amendments), all annual and interim reports of the
Trustee related to the entire Plan, the latest annual report and
the summary plan description;
(d) determine the fact of a Participant's death and of any
Beneficiary's right to receive the deceased Participant's
interest based upon such proof and evidence as it deems
necessary;
(e) establish and review at least annually a funding policy bearing
in mind both the short-run and long-run needs and goals of the
Plan. To the extent Participants may direct their own
investments, the funding policy shall focus on which Investment
Funds are available for Participants to use; and
(f) adjudicate claims pursuant to the claims procedure described in
Section 18.
15.5 Advisors May be Retained
The Administrator may retain such agents and advisors (including
attorneys, accountants, actuaries, consultants, record keepers,
investment counsel and administrative assistants) as it considers
necessary to assist it in the performance of its duties. The
Administrator shall also comply with the bonding requirements of ERISA
section 412.
41
15.6 Delegation of Administrator Duties
The Company, as Administrator of the Plan, has appointed a Committee
to administer the Plan on its behalf. The Company shall provide the
Trustee with the names and specimen signatures of any persons
authorized to serve as Committee members and act as or on its behalf.
Any Committee member appointed by the Company shall serve at the
pleasure of the Company, but may resign by written notice to the
Company. Committee members shall serve without compensation from the
Plan for such services. Except to the extent that the Company
otherwise provides, any delegation of duties to a Committee shall
carry with it the full discretionary authority of the Administrator to
complete such duties.
15.7 Committee Operating Rules
(a) Actions of Majority. Any act delegated by the Company to the
Committee may be done by a majority of its members. The
majority may be expressed by a vote at a meeting or in writing
without a meeting, and a majority action shall be equivalent to
an action of all Committee members.
(b) Meetings. The Committee shall hold meetings upon such notice,
place and times as it determines necessary to conduct its
functions properly.
(c) Reliance by Trustee. The Committee may authorize one or more of
its members to execute documents on its behalf and may authorize
one or more of its members or other individuals who are not
members to give written direction to the Trustee in the
performance of its duties. The Committee shall provide such
authorization in writing to the Trustee with the name and
specimen signatures of any person authorized to act on its
behalf. The Trustee shall accept such direction and rely upon
it until notified in writing that the Committee has revoked the
authorization to give such direction. The Trustee shall not be
deemed to be on notice of any change in the membership of the
Committee, parties authorized to direct the Trustee in the
performance of its duties, or the duties delegated to and by the
Committee until notified in writing.
42
16 MANAGEMENT OF INVESTMENTS
-------------------------
16.1 Trust Agreement
All Plan assets shall be held by the Trustee in trust, in accordance
with those provisions of this Plan and Trust which relate to the
Trustee, for use in providing Plan benefits and paying Plan expenses
not paid directly by the Employer. Plan benefits will be drawn solely
from the Trust and paid by the Trustee as directed by the
Administrator. Notwithstanding, the Administrator may appoint, with
the approval of the Trustee, another trustee to hold and administer
Plan assets which do not meet the requirements of Section 16.2.
16.2 Investment Funds
The Administrator is hereby granted authority to direct the Trustee to
invest Trust assets in one or more Investment Funds. The number and
composition of Investment Funds may be changed from time to time,
without the necessity of amending this Plan and Trust document. The
Trustee may establish reasonable limits on the number of Investment
Funds as well as the acceptable assets for any such Investment Fund.
Each of the Investment Funds may be comprised of any of the following:
(a) shares of a registered investment company, whether or not the
Trustee or any of its affiliates is an advisor to, or other
service provider to, such company;
(b) collective investment funds maintained by the Trustee, or any
other fiduciary to the Plan, which are available for investment
by trusts which are qualified under Code sections 401(a) and
501(a);
(c) individual equity and fixed income securities which are readily
tradeable on the open market;
(d) guaranteed investment contracts issued by a bank or insurance
company; and
(e) interest bearing deposits of the Trustee.
Any Investment Fund assets invested in a collective investment fund,
shall be subject to all the provisions of the instruments establishing
and governing such fund. These instruments, including any subsequent
amendments, are incorporated herein by reference.
16.3 Authority to Hold Cash
The Trustee shall have the authority to cause the investment manager
of each Investment Fund to maintain sufficient deposit or money market
type assets
43
in each Investment Fund to handle the Fund's liquidity and
disbursement needs. Each Participant's and Beneficiary's Sweep
Account, which is used to hold assets pending investment or
disbursement, shall consist of interest bearing deposits of the
Trustee.
16.4 Trustee to Act Upon Instructions
The Trustee shall carry out instructions to invest assets in the
Investment Funds as soon as practicable after such instructions are
received from the Administrator, Participants, or Beneficiaries. Such
instructions shall remain in effect until changed by the
Administrator, Participants or Beneficiaries.
16.5 Administrator Has Right to Vote Registered Investment Company Shares
The Administrator shall be entitled to vote proxies or exercise any
shareholder rights relating to shares held on behalf of the Plan in a
registered investment company. Notwithstanding, the authority to vote
proxies and exercise shareholder rights related to such shares held in
a Custom Fund is vested as provided otherwise in Section 16.
16.6 Custom Fund Investment Management
The Administrator may designate, with the consent of the Trustee, an
investment manager for any Investment Fund established by the Trustee
solely for Participants of this Plan (a "Custom Fund"). The
investment manager may be the Administrator, Trustee or an investment
manager pursuant to ERISA section 3(38). The Administrator shall
advise the Trustee in writing of the appointment of an investment
manager and shall cause the investment manager to acknowledge to the
Trustee in writing that the investment manager is a fiduciary to the
Plan.
A Custom Fund shall be subject to the following:
(a) Guidelines. Written guidelines, acceptable to the Trustee,
shall be established for a Custom Fund. If a Custom Fund
consists solely of collective investment funds or shares of a
registered investment company (and sufficient deposit or money
market type assets to handle the Fund's liquidity and
disbursement needs), its' underlying instruments shall
constitute the guidelines.
(b) Authority of Investment Manager. The investment manager of a
Custom Fund shall have the authority to vote or execute proxies,
exercise shareholder rights, manage, acquire, and dispose of
Trust assets.
(c) Custody and Trade Settlement. Unless otherwise expressly agreed
to by the Trustee, the Trustee shall maintain custody of all
Custom Fund
44
assets and be responsible for the settlement of all Custom Fund
trades. For purposes of this section, shares of a collective
investment fund, shares of a registered investment company and
guaranteed investment contracts issued by a bank or insurance
company, shall be regarded as the Custom Fund assets instead of
the underlying assets of such instruments.
(d) Limited Liability of Co-Fiduciaries. Neither the Administrator
nor the Trustee shall be obligated to invest or otherwise manage
any Custom Fund assets for which the Trustee or Administrator is
not the investment manager nor shall the Administrator or
Trustee be liable for acts or omissions with regard to the
investment of such assets except to the extent required by
ERISA.
16.7 Authority to Segregate Assets
The Company may direct the Trustee to split an Investment Fund into
two or more funds in the event any assets in the Fund are illiquid or
the value is not readily determinable. In the event of such
segregation, the Company shall give instructions to the Trustee on
what value to use for the split-off assets, and the Trustee shall not
be responsible for confirming such value.
45
17 TRUST ADMINISTRATION
--------------------
17.1 Trustee to Construe Trust
The Trustee shall have the discretionary authority to construe those
provisions of this Plan and Trust which relate to the Trustee and to
do all things necessary or convenient to the administration of the
Trust, whether or not such powers are specifically set forth in this
Plan and Trust. Actions taken in good faith by the Trustee shall be
conclusive and binding on all interested parties, and shall be given
the maximum possible deference allowed by law.
17.2 Trustee To Act As Owner of Trust Assets
Subject to the specific conditions and limitations set forth in this
Plan and Trust, the Trustee shall have all the power, authority,
rights and privileges of an absolute owner of the Trust assets and,
not in limitation but in amplification of the foregoing, may:
(a) receive, hold, manage, invest and reinvest, sell, tender,
exchange, dispose of, encumber, hypothecate, pledge, mortgage,
lease, grant options respecting, repair, alter, insure, or
distribute any and all property in the Trust;
(b) borrow money, participate in reorganizations, pay calls and
assessments, vote or execute proxies, exercise subscription or
conversion privileges, exercise options and register any
securities in the Trust in the name of the nominee, in federal
book entry form or in any other form as will permit title
thereto to pass by delivery;
(c) renew, extend the due date, compromise, arbitrate, adjust,
settle, enforce or foreclose, by judicial proceedings or
otherwise, or defend against the same, any obligations or claims
in favor of or against the Trust; and
(d) lend, through a collective investment fund, any securities held
in such collective investment fund to brokers, dealers or other
borrowers and to permit such securities to be transferred into
the name and custody and be voted by the borrower or others.
17.3 United States Indicia of Ownership
The Trustee shall not maintain the indicia of ownership of any Trust
assets outside the jurisdiction of the United States, except as
authorized by ERISA section 404(b).
46
17.4 Tax Withholding and Payment
(a) Withholding. Effective for taxable distributions made on or
before December 31, 1992 the Trustee shall calculate and
withhold federal (and, if applicable, state) income taxes in
accordance with a Participant's withholding election. Effective
for taxable distributions made after December 31, 1992, the
Trustee shall calculate and withhold federal (and, if
applicable, state) income taxes with regard to any Eligible
Rollover Distribution that is not paid as a Direct Rollover.
With regard to any taxable distribution that is not an Eligible
Rollover Distribution, the Trustee shall calculate and withhold
federal (and, if applicable, state) income taxes in accordance
with the Participant's withholding election.
(b) Taxes Due From Investment Funds. The Trustee shall pay from the
Investment Fund any taxes or assessments imposed by any taxing
or governmental authority on such Fund or its income, including
related interest and penalties.
17.5 Trustee Duties and Limitations
Unless otherwise agreed to by the Trustee, the Trustee's duties shall
be confined to construing the terms of the Plan and Trust as they
relate to the Trustee, receiving funds on behalf of and making
payments from the Trust, safeguarding and valuing Trust assets, and
investing and reinvesting Trust assets in the Investment Funds as
directed by the Administrator or Participants. The Trustee shall have
no duty or authority to ascertain whether Contributions are in
compliance with the Plan, to enforce collection or to compute or
verify the accuracy or adequacy or any amount to be paid to it by the
Employer. The Trustee shall not be liable for the proper application
of any part of the Trust with respect to any disbursement made at the
direction of the Administrator.
17.6 Trust Accounting
(a) Annual Report. Within 60 days (or other reasonable period)
following the close of the Plan Year, the Trustee shall provide
the Administrator with an annual accounting of Trust assets and
information to assist the Administrator in meeting ERISA's
annual reporting and audit requirements.
(b) Periodic Reports. The Trustee shall maintain records and
provide sufficient reporting to allow the Administrator to
properly monitor the Trust's assets and activity.
(c) Administrator Approval. Approval of any Trustee accounting will
automatically occur 90 days after such accounting has been
received by the Administrator, unless the Administrator files a
written objection
47
with the Trustee within such time period. Such approval shall
be final as to all matters and transactions stated or shown
therein and binding upon the Administrator.
17.7 Valuation of Certain Assets
If the Trustee determines the Trust holds any asset which is not
readily tradable and listed on a national securities exchange
registered under the Securities Exchange Act of 1934, as amended, the
Trustee may engage a qualified independent appraiser to determine the
fair market value of such property, and the appraisal fees shall be
paid from the Investment Fund containing the asset.
17.8 Legal Counsel
The Trustee may consult with legal counsel of its choice, including
counsel for the Employer or counsel of the Trustee, upon any question
or matter arising under this Plan and Trust. When relied upon by the
Trustee, the opinion of such counsel shall be evidence that the
Trustee has acted in good faith.
17.9 Fees and Expenses
The Trustee's fees for its services as Trustee shall be such as may be
mutually agreed upon by the Company and the Trustee. Trustee fees and
all reasonable expenses of counsel and advisors retained by the
Trustee shall be paid in accordance with Section 6.
48
18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION
-------------------------------------------------
18.1 Plan Does Not Affect Employment Rights
The Plan does not provide any employment rights to any Employee. The
Employer expressly reserves the right to discharge an Employee at any
time, with or without cause, without regard to the effect such
discharge would have upon the Employee's interest in the Plan.
18.2 Limited Return of Contributions
Except as provided in this paragraph, (1) Plan assets shall not revert
to the Employer nor be diverted for any purpose other than the
exclusive benefit of Participants or their Beneficiaries; and (2) a
Participant's vested interest shall not be subject to divestment. As
provided in ERISA section 403(c)(2), the actual amount of a
Contribution made by the Employer (or the current value of the
Contribution if a net loss has occurred) may revert to the Employer
if:
(a) such Contribution is made by reason of a mistake of fact;
(b) initial qualification of the Plan under Code section 401(a) is
not received and a request for such qualification is made within
the time prescribed under Code section 401(b) (the existence of
and Contributions under the Plan are hereby conditioned upon
such qualification); or
(c) such Contribution is not deductible under Code section 404 (such
Contributions are hereby conditioned upon such deductibility) in
the taxable year of the Employer for which the Contribution is
made.
The reversion to the Employer must be made (if at all) within one year
of the mistaken payment of the Contribution, the date of denial of
qualification, or the date of disallowance of deduction, as the case
may be. A Participant shall have no rights under the Plan with
respect to any such reversion.
18.3 Assignment and Alienation
As provided by Code section 401(a)(13) and to the extent not otherwise
required by law, no benefit provided by the Plan may be anticipated,
assigned or alienated, except:
(a) to create, assign or recognize a right to any benefit with
respect to a Participant pursuant to a QDRO, or
(b) to use a Participant's vested Account balance as security for a
loan from the Plan which is permitted pursuant to Code section
4975.
49
18.4 Facility of Payment
If a Plan benefit is due to be paid to a minor or if the Administrator
reasonably believes that any payee is legally incapable of giving a
valid receipt and discharge for any payment due him or her, the
Administrator shall have the payment of the benefit, or any part
thereof, made to the person (or persons or institution) whom it
reasonably believes is caring for or supporting the payee, unless it
has received due notice of claim therefor from a duly appointed
guardian or conservator of the payee. Any payment shall to the extent
thereof, be a complete discharge of any liability under the Plan to
the payee.
18.5 Reallocation of Lost Participant's Accounts
If the Administrator cannot locate a person entitled to payment of a
Plan benefit after a reasonable search, the Administrator may at any
time thereafter treat such person's Account as forfeited and use such
amount to offset any Employer Contributions. If such person
subsequently presents the Administrator with a valid claim for the
benefit, such person shall be paid the amount treated as forfeited,
plus the interest that would have been earned in the Sweep Account to
the date of determination. The Administrator shall pay the amount
through an additional Employer Contribution.
18.6 Claims Procedure
(a) Right to Make Claim. An interested party who disagrees with the
Administrator's determination of his or her right to Plan
benefits must submit a written claim and exhaust this claim
procedure before legal recourse of any type is sought. The
claim must include the important issues the interested party
believes support the claim. The Administrator, pursuant to the
authority provided in this Plan, shall either approve or deny
the claim.
(b) Process for Denying a Claim. The Administrator's partial or
complete denial of an initial claim must include an
understandable, written response covering (1) the specific
reasons why the claim is being denied (with reference to the
pertinent Plan provisions) and (2) the steps necessary to
perfect the claim and obtain a final review.
(c) Appeal of Denial and Final Review. The interested party may make
a written appeal of the Administrator's initial decision, and
the Administrator shall respond in the same manner and form as
prescribed for denying a claim initially.
50
(d) Time Frame. The initial claim, its review, appeal and final
review shall be made in a timely fashion, subject to the
following time table:
Days to Respond
Action From Last Action
------ ----------------
Administrator determines benefit NA
Interested party files initial request 60 days
Administrator's initial decision 90 days
Interested party requests final review 60 days
Administrator's final decision 60 days
However, the Administrator may take up to twice the maximum
response time for its initial and final review if it provides an
explanation within the normal period of why an extension is
needed and when its decision will be forthcoming.
18.7 Construction
Headings are included for reading convenience. The text shall control
if any ambiguity or inconsistency exists between the headings and the
text. The singular and plural shall be interchanged wherever
appropriate. References to Participant shall include Beneficiary when
appropriate and even if not otherwise already expressly stated.
18.8 Jurisdiction and Severability
The Plan and Trust shall be construed, regulated and administered
under ERISA and other applicable federal laws and, where not otherwise
preempted, by the laws of the State of California. If any provision
of this Plan and Trust shall become invalid or unenforceable, that
fact shall not affect the validity or enforceability of any other
provision of this Plan and Trust. All provisions of this Plan and
Trust shall be so construed as to render them valid and enforceable in
accordance with their intent.
18.9 Indemnification by Employer
The Employers hereby agree to indemnify all Plan fiduciaries against
any and all liabilities resulting from any action or inaction,
(including a Plan termination in which the Company fails to apply for
a favorable determination from the Internal Revenue Service with
respect to the qualification of the Plan upon its termination), in
relation to the Plan or Trust (1) including (without limitation)
expenses reasonably incurred in the defense of any claim relating to
the Plan or its assets, and amounts paid in any settlement relating to
the Plan or its assets, but (2) excluding liability resulting from
actions or inactions made in bad faith, or resulting from the
negligence or willful misconduct of the Trustee. The Company shall
have the right, but not the obligation, to conduct the defense of any
action to which this Section applies. The Plan fiduciaries are not
entitled to indemnity from the Plan assets relating to any such
action.
51
19 AMENDMENT, MERGER AND TERMINATION
---------------------------------
19.1 Amendment
The Company reserves the right to amend this Plan and Trust at any
time, to any extent and in any manner it may deem necessary or
appropriate. The Company (and not the Trustee) shall be responsible
for adopting any amendments necessary to maintain the qualified status
of this Plan and Trust under Code sections 401(a) and 501(a). The
Administrator shall have the authority to adopt Plan and Trust
amendments which have no substantial adverse financial impact upon an
Employer or the Plan. All interested parties shall be bound by any
amendment, provided that no amendment shall:
(a) become effective until it is accepted in writing by the Trustee
(which acceptance shall not unreasonably be withheld);
(b) except to the extent permissible under ERISA and the Code, make
it possible for any portion of the Trust assets to revert to an
Employer or to be used for, or diverted to, any purpose other
than for the exclusive benefit of Participants and Beneficiaries
entitled to Plan benefits and to defray reasonable expenses of
administering the Plan;
(c) decrease the rights of any Employee to benefits accrued
(including the elimination of optional forms of benefits) to the
date on which the amendment is adopted, or if later, the date
upon which the amendment becomes effective, except to the extent
permitted under ERISA and the Code; nor
(d) permit an Employee to be paid the balance of his or her Pre-Tax
Account unless the payment would otherwise be permitted under
Code section 401(k).
19.2 Merger
This Plan and Trust may not be merged or consolidated with, nor may
its assets or liabilities be transferred to, another plan unless each
Participant and Beneficiary would, if the resulting plan were then
terminated, receive a benefit just after the merger, consolidation or
transfer which is at least equal to the benefit which would be
received if either plan had terminated just before such event.
19.3 Plan Termination
The Company may, at any time and for any reason, terminate the Plan,
or completely discontinue contributions. Upon either of these events,
or in the event of a partial termination of the Plan within the
meaning of Code section 411(d)(3), the Accounts of each affected
Employee shall be fully vested.
52
Complete distributions or withdrawals will be made in accordance with
the terms of the Plan as in effect at the time of the Plan's
termination or as thereafter amended provided that a post-termination
amendment will not be effective to the extent that it violates Section
19.1 unless it is required in order to maintain the qualified status
of the Plan upon its termination. The Trustee's and Employer's
authority shall continue beyond the Plan's termination date until all
Trust assets have been liquidated and distributed.
19.4 Termination of Employer's Participation
Any Employer may terminate its Plan participation upon written notice
executed by the Employer and delivered to the Company. Upon the
Employer's request, the Company may instruct the Trustee and
Administrator to spin off all affected Accounts and underlying assets
into a separate qualified plan under which the Employer shall assume
the powers and duties of the Company. Alternatively, the Company may
treat the event as a partial termination described above or continue
to maintain the Accounts under the Plan.
19.5 Replacement of the Trustee
The Trustee may resign as Trustee under this Plan and Trust or may be
removed by the Company at any time upon at least 90 days written
notice (or less if agreed to by both parties). In such event, the
Company shall appoint a successor trustee by the end of the notice
period. The successor trustee shall then succeed to all the powers
and duties of the Trustee under this Plan and Trust. If no successor
trustee has been named by the end of the notice period, the Company's
chief executive officer shall become the trustee, or if he or she
declines, the Trustee may petition the court for the appointment of a
successor trustee.
19.6 Final Settlement and Accounting of Trustee
(a) Final Settlement. As soon as is administratively feasible after
its resignation or removal as Trustee, the Trustee shall
transfer to the successor trustee all property currently held by
the Trust. However, the Trustee is authorized to reserve such
sum of money as it may deem advisable for payment of its
accounts and expenses in connection with the settlement of its
accounts or other fees or expenses payable by the Trust. Any
balance remaining after payment of such fees and expenses shall
be paid to the successor trustee.
(b) Final Accounting. The Trustee shall provide a final accounting
to the Administrator within 90 days of the date Trust assets are
transferred to the successor trustee.
53
(c) Administrator Approval. Approval of the final accounting will
automatically occur 90 days after such accounting has been
received by the Administrator, unless the Administrator files a
written objection with the Trustee within such time period.
Such approval shall be final as to all matters and transactions
stated or shown therein and binding upon the Administrator.
54
APPENDIX A - INVESTMENT FUNDS
I. Investment Funds Available
The Investment Funds offered to Participants and Beneficiaries as of the
Execution Date include this set of daily valued funds:
Category Funds
-------- -----
Money Market Money Market
------------
Fixed Income Income Accumulation
------------ Short-Intermediate Term
U.S. Treasury Allocation
Balanced Asset Allocation
--------
Equity Growth Stock
------ SEI International Equity
S&P 500 Stock
S&P MidCap Stock
II. Default Investment Fund
The default Investment Fund as of the Execution Date is the Money Market
Fund.
III. Maximum Percentage Restrictions Applicable to Certain Investment Funds
As of the Effective Date, there are no maximum percentage restrictions
applicable to any Investment Funds.
55
APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES
As of the Effective Date, payment of Plan fees and expenses shall be as follows:
1) Investment Management Fees: These are paid by Participants in that
management fees reduce the investment return reported and credited to
Participants.
2) Recordkeeping Fees: These are paid by Participants and are assessed monthly
and billed/collected from Accounts quarterly.
3) Loan Fees: A $3.50 per month fee is assessed and billed/collected
quarterly from the Account of each Participant who has an outstanding loan
balance for loans entered into on or after January 1, 1990.
4) Investment Fund Election Changes: For each Investment Fund election change
by a Participant, in excess of 4 changes per year, a $10 fee will be
assessed and billed/collected quarterly from the Participant's Account.
5) Recurring Payment Fees: A $3.00 per check fee will be assessed and
billed/collected quarterly from the Participant's Account.
6) Additional Fees Paid by Participants: Trustee, nondiscrimination testing,
Form 5500 preparation and Participant Account statement handling and
postage fees shall be added to the recordkeeping fees and assessed against
Participants' Accounts, per 2) above. Estimates of the fees shall be
determined and reconciled, at least annually.
56
APPENDIX C - LOAN INTEREST RATE
As of the Effective Date, the interest rate charged on Participant loans shall
be equal to the U.S. Treasury rate for a note of the same maturity, plus 1%.
The rate may be determined once for all loans made in a month, and the maturity
may be determined to the nearest year.
57